Postmedia Network acquires Canwest's newspaper division
Some of Canwest's newspapers are displayed in Ottawa on January 8, 2010. (THE CANADIAN PRESS/Adrian Wyld)
Published Wednesday, July 14, 2010 7:07AM EDT
TORONTO - After months of courtroom wrangling, Canwest's newspaper division -- home to the National Post and other big city dailies -- has confirmed the Postmedia Network Canada Corp. as its new owners.
Canwest said Tuesday its newspaper subsidiary has successfully emerged from creditor protection under the ownership of Postmedia, the company headed by National Post chief executive Paul Godfrey.
Under the arrangement, the group acquired the newspapers for $1.1 billion. In total, the chain includes 11 dailies and 26 community newspapers.
The new company, backed by New York hedge fund Golden Tree Asset Management, now holds some of Canada's largest daily newspapers including the Post, Vancouver Sun, Calgary Herald and Ottawa Citizen.
Godfrey will meet with the media company's staff this week to discuss changes to the operations.
"I'll be announcing some changes in the next few days of structure, and who the directors are, and as the weeks go by probably make some other announcements and changes," he said in an interview.
However, when asked about whether job cuts could be on the horizon, Godfrey said it was premature.
"The deal just closed today," he said. "I haven't had a chance to even look at that."
Godfrey has made it clear he wants the company to operate as a "digital-first newspaper" while still focusing on traditional print copies, which are a bigger revenue generator.
The Canadian wing of the Communications Workers of America, which represents more than 800 workers at five Postmedia dailies, issued a statement saying it hopes to meet with Godfrey about the future of the company.
"We'd like to think the new owners understand that good journalism is the key factor in the profitability of these venerable newspapers," union director Arnold Amber said.
Postmedia plans to apply for a listing on the Toronto Stock Exchange, though an application hasn't been filed yet. Godfrey said he hopes the company will make a public offering before the end of this year.
Last month, an Ontario Superior Court judge gave approval for Canwest Global Communications Corp. to sell its newspaper division to a group of its creditors led by Godfrey.
Several divisions of Canwest filed for creditor protection last fall after it was unable to meet repayment obligations for $4 billion in debt. The process included a hunt for buyers for large chunks of its business.
Canwest's TV stations have been sold in $2-billion deal to Shaw Communications Inc. (TSX:SJR.B), the big Calgary cable and satellite TV operator, which is expected to be finalized this fall.