Canwest papers sold for $1.1 billion
The winning bidder for the mediaco's stable of newspapers is a group of creditors headed by current National Post president Paul Godfrey. Cross-platform media sales across broadcast and print 'being worked on.'
The battle for Canwest LP, the company’s newspaper division, ended last evening with the approval of $1.1 billion offer by a group of the company’s creditors.
Under the agreement, National Post president, and former Sun Media CEO, Paul Godfrey, has been named president and CEO of the new company. The billion-dollar offer, which was higher than many expected, was deemed a ‘superior cash offer’ by the court-appointed monitor of the company’s bankruptcy proceedings and its financial advisor, RBC Capital Markets. It is anticipated that the new company will be publicly traded, a release on the acquisition stated.
The Canwest LP group is comprised of 11 major-market dailies and 35 community newspapers, including the National Post (which was not part of the company’s filing under the Companies’ Creditors Arrangement Act), Edmonton Journal, Calgary Herald, Montreal Gazette and Ottawa Citizen. Websites in the group include Canada.com, Driving.ca and Dose.ca. In the release, the company confirmed that ‘all existing newspaper operations’ will be maintained and all full-time and ‘substantially all’ part-time employees will keep their jobs, as well as their pension and benefit plans.
The acquisition of Canwest LP follows last week’s announcement that Alberta-based Shaw Communications purchased the entirety of Canwest’s television division in a deal worth approximately $2 billion. In an interview this morning, John Douglas, senior VP public affairs, Canwest, said that although the television division and the newspaper group are no longer under the same ownership, both groups are working to extend agreements in place and create a platform for future sales.
‘They are working on a co-operative way to be able to cross-sell,’ Douglas says. ‘We said all along that those agreements would be extended and I know that’s being worked on.’
‘If something is good for advertisers and good for the two lines of business, we’d be foolish not to continue on with it,’ he adds.
The deal is set to go before the courts May 17 and is expected to close July 15, 2010.