Shares of Torstar Corp. (TSX:TS.B), publisher of The Toronto Star, rallied to an eight-month high after the company received an unsolicited takeover offer from a private investor group.
The unsolicited bid comes less than two weeks before shareholders were set to vote on an initial buyout deal by two prominent Canadian business families. Shares of the Toronto Star parent company rose 16% to 72 cents as it resumed trading after saying a competing proposal may result in a "superior offer" to an earlier bid from NordStar Capital LP.
Brothers Matthew Proud, Chief Executive of Dye & Durham Corp., and Tyler Proud, Head of Avesdo Inc., are leading a $58 million competing bid, equal to about 72 cents per share. NordStar, owned by the Rivett and Bitove families, had offered to buy Torstar for 63 cents a share in cash in May, putting the price tag for Torstar at $51 million.
Nordstar said it has no plans to increase its offer. The original deal is still "in the best interest of the company," Torstar’s board said in a press release. "The board continues to recommend that Torstar shareholders vote in favor of the NordStar transaction."
Torstar, which also publishes more than 70 other newspapers, has been unable to turn around years of losses in advertising revenue. Before Nordstar’s offer, Torstar’s shares had slumped almost 80% since the end of 2017.
