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The Toronto Star building stands in Toronto on June 8, 2016.Eduardo Lima/The Canadian Press

Shareholders of Torstar Corp. approved a $60-million deal to take the publishing company private, even though rival bidders had floated a richer cash offer a day earlier.

Holders of Torstar’s A- and B-class shares voted 98.7 per cent in favour of the takeover by NordStar Capital LP at a meeting on Tuesday, the company said. The bid for the publisher of the Toronto Star newspaper had the support of major shareholder Fairfax Financial Holdings Ltd., as well as the five families that make up Torstar’s voting trust.

Among minority shareholders, the deal won 81.9 per cent approval, Torstar said.

NordStar, controlled by Toronto entrepreneurs Jordan Bitove and Paul Rivett, had offered 74 cents a share for Torstar. It raised the offer from 63 cents in early July after facing a rival bid from Canadian Modern Media Holdings Inc.

The situation heated up on Monday when Canadian Modern Media, set up by technology entrepreneurs Matthew and Tyler Proud, along with Bay Street dealmaker Neil Selfe, submitted an 11th-hour offer of 80 cents a share.

The Torstar board ruled it out, however, saying Fairfax and the families had already committed to backing the NordStar deal through hard lockup agreements. The company also raised questions about how solid the financing was behind the rival offer.

Despite Tuesday’s strong voting result, the NordStar bid is not a done deal yet. The transaction must still win approval in court on Thursday, and some shareholders are expected to voice concerns during the proceedings.

Lawyer Joe Groia, who represents investor and former Torstar executive Patrick Collins, who owns more than one million non-voting B shares, said he plans to attend the virtual hearing to see if it deals adequately with shareholder concerns.

“I intend to appear, see what material the company files and see whether the court has sufficient material to come to a determination or whether some of the questions the shareholders are concerned about really need to be looked into more carefully before a final decision is made,” Mr. Groia said in an interview Tuesday.

After Torstar rejected Canadian Modern Media’s first bid and finalized the deal with NordStar, some shareholders complained that the process did not allow for a full auction to take place. Indeed, the Ontario Securities Commission said it received complaints about the transaction, but spokeswoman Kate Ballotta declined to comment further.

No shareholder asked any questions about the late bid from Canadian Modern Media or any other issues at Tuesday’s shareholder voting meeting.

“I feel our process was very sound,” Torstar chairman John Honderich said during the meeting.

David Peterson, the former Ontario Liberal premier who will be named vice-chair of the Star, pointed out that 26 parties were contacted to see if they had any interest in bidding after NordStar approached the company in February and none launched a competing offer.

“We trust the court will see through capital markets participants misleading the public and waiving a purported non-binding unsupported bid after a robust process was closed,” Mr. Peterson said in a statement.

Torstar, which also publishes such papers as the Hamilton Spectator and Waterloo Region Record in Ontario, has spent years selling assets, closing newspapers and cutting staff as advertising revenue has slumped. Business conditions worsened with the pandemic.

NordStar’s executives have said they plan to accelerate the push to make the company a digital news and information provider, while selling non-core assets they say they believe can bring in $100-million.

They promised the families who have controlled the newspaper for more than six decades that they would adhere to progressive values that have defined the Star’s editorial position. The principles were developed by longtime publisher Joseph Atkinson, who died in 1948. As part of that commitment, NordStar said Mr. Peterson would be steward of those values.

With a file from Sean Silcoff

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