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With the deal closed, Torstar shareholders get 74 cents a share from NordStar.Eduardo Lima/The Canadian Press

A rival bidder for Torstar Corp. has dropped its legal challenge to a $60-million takeover of the publishing company, allowing NordStar Capital LP to complete its friendly deal after weeks of heated sparring.

Canadian Modern Media Holdings Inc. (CMMH) had been scheduled this Friday to appeal a judge’s approval of NordStar’s acquisition of the company that publishes the Toronto Star and other newspapers, saying it believed the process was unfair. Last week, however, CMMH was denied a stay to prevent the deal from closing pending the appeal.

On Wednesday, Torstar said CMMH agreed to cancel the appeal on terms acceptable to all involved. “CMMH has advised that it believes that under NordStar’s ownership, Torstar will be well positioned to prosper and remain a platform for outstanding journalism in Canada,” Torstar said in a statement.

An official with CMMH said the company had no comment.

With the deal closed, Torstar shareholders get 74 cents a share from NordStar, which is controlled by Toronto-based investors Jordan Bitove and Paul Rivett. They have said they intend to accelerate the struggling company’s shift to a digital media business model, while adhering to the progressive editorial values championed by five families that controlled the company for more than 60 years.

It is a tall order. In recent years, Torstar, which also publishes such newspapers as the Hamilton Spectator, the Waterloo Region Record and the St. Catharines Standard, has bled red ink as print advertising revenues dwindled. The partners have already said they could sell up to $100-million in non-core assets as they proceed with their plans.

“We are excited to write the next chapter with new energy and commitment,” Mr. Bitove said in a statement.

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