Two of Canada's biggest newspaper groups are currently in talks to merge, according to a statement released by the two publishers on Tuesday.
Postmedia Network Canada Corp, which owns publications such as National Post, The Vancouver Sun, and The Calgary Herald, and Nordstar Capital LP, the owner of Metroland Media Group and The Toronto Star, said the discussions are still non-binding, and the potential merger would involve an equal division of voting rights.
They noted that Postmedia shareholders would hold a 56% economic interest, while Nordstar would hold 44%. Nordstar would retain a 65% interest in Toronto Star Inc.
Under the proposed merger, Jordan Bitove, publisher of The Toronto Star, would become the chairman of the combined entity, while Andrew MacLeod, the chief executive of Postmedia, would assume the role of CEO.
Postmedia said it plans to ensure the editorial independence of The Toronto Star by incorporating a new company to manage its editorial operations.
The deal would also involve the conversion of a portion of outstanding debt into equity, resulting in "significant economic dilution" for existing shareholders, however, it would reduce the overall debt burden of the merged entity, the companies said.
In the joint statement, MacLeod emphasized the core rationale behind the merger, commenting: "The proposed merged entity would provide the best opportunity to ensure strong news media coverage for Canadians from coast to coast."
The proposed merger awaits further developments and approvals.
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