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Canadian Modern Media Holdings will seek to have NordStar’s acquisition of the company that publishes The Toronto Star and other newspapers halted at a hearing set for Friday morning.Fred Lum/The Globe and Mail

NordStar Capital LP has delayed the close of its $60-million takeover of Torstar Corp. to allow a rival bidder to make its case for a stay of the deal’s court approval and an appeal of the judge’s decision.

Canadian Modern Media Holdings Inc. will seek to have NordStar’s acquisition of the company that publishes The Toronto Star and other newspapers halted at a hearing set for Friday morning. The transaction was previously scheduled to close on Thursday.

CMMH, whose principals include technology entrepreneurs Matthew Proud and his brother Tyler Proud, as well as Bay Street investment banker Neil Selfe, say the NordStar deal is “neither fair nor reasonable.” The takeover won majority support from Torstar’s shareholders, but CMMH complains that investors did not get a chance to consider its last offer.

The rivals contend that Ontario Superior Court Justice Cory Gilmore erred in her approval of the deal, partly because she was rushed. The group had just 15 minutes to present its case at a hearing last Thursday and it described that as “procedurally unfair.”

CMMH had launched a rival bid in early July, which prompted NordStar, run by investors Jordan Bitove and Paul Rivett, to raise its offer to 74 cents a share from 63 cents, and extract hard lockup agreements with Torstar’s major shareholders to support the bid. CMMH later floated an offer of 80 cents a share, but Justice Gilmore ruled that it came too late – the lockups were in place.

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