NordStar Capital LP plans to close its $60-million takeover of Torstar Corp. after a spurned rival bidder lost a court bid to prevent that from happening.
Ontario Superior Court Justice Michael Penny on Friday denied an application from Canadian Modern Media Holdings Inc. (CMMH) for a stay pending an appeal of a previous court decision approving NordStar’s takeover of the company that owns the Toronto Star and other newspapers.
It was the latest in a series of CMMH challenges to the friendly takeover, which won the support of a majority of Torstar shareholders earlier this month. The company had argued the Torstar board cut off the bidding before CMMH had an opportunity to raise its offer, thereby denying shareholders more money for their stock.
Following a virtual court hearing, Justice Penny said CMMH had failed to demonstrate that there was a serious issue for its appeal that required a stay, or that CMMH would suffer irreparable harm without it. He said he would release the reasons for his decision later.
Following the ruling, a source close to NordStar said the company was working with Torstar to complete the deal “shortly.” The Globe has agreed not to name the source because they were not authorized to speak publicly.
NordStar, run by Toronto investors Jordan Bitove and Paul Rivett, offered 74 cents a share for Torstar, an increase from its initial 63-cent offer, after CMMH floated a bid for 72 cents plus a contingent payment from future asset sales.
CMMH complained shareholders weren’t afforded full details of its bid before Norstar locked up support from Torstar’s family voting trust and Fairfax Financial Holdings Ltd., a major holder of nonvoting Torstar shares.
CMMH’s principals are technology entrepreneur Tyler Proud and Bay Street investment banker Neil Selfe. Mr. Proud’s brother, Matthew Proud, chief executive of legal software provider Dye & Durham Corp., had been listed as an executive – and he owned a large block of Torstar shares – but CMMH says he no longer is part of the group.
CMMH later tried to float an offer of 80 cents a share, but Torstar’s board ruled it out as unworkable, largely because the major shareholders had committed to NordStar.
Mr. Selfe said he had no comment on what CMMH’s next moves might be.
CMMH had argued the approval of the deal by Justice Cory Gilmore was neither fair nor reasonable, partly because it was rushed; the group had just 15 minutes to present its case at a hearing last week. It described that as “procedurally unfair.” Alistair Crawley, CMMH’s lawyer, argued that if his client was not granted the stay, its appeal could be moot.
The appeal hearing is scheduled for next Friday.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.