A More Likely Buy-out ScenarioTorstar doesn't have the cash resources nor the appetite for the associated risk to privatize the Company on their own. They could, however, strike a deal (if it hasn't already been privately struck) to buy out the 30 million shares not owned by Fairfax. Here is how it could work with the agreement of Fairfax:
- Sell VerticalScope and net enough cash to pay the non-Voting Trust and Fairfax shareholders $6/share - total cost $180 million or about what they paid in cash for VerticalScope;
- Establishment of a sunset date with Fairfax to transfer ownership to Fairfax at a price and under terms that would allow the Voting Trust to gracefully exit the mismanagement of Torstar;
- Fairfax would then be free to consummate a synergistic deal with Postmedia once Honderich (age 72) and Godfrey (age 79) are out of the picture. Fairfax would optimize the performance of these media companies to ensure their long-term survival.
I wish I could make it more complicated. An investment in TS.b will take time to pay off and at times will frustrate the most patient of investors, but the Voting Trust is ageing quickly and is running out of precious time and money. Watching the stock every day is a recipe for an ulcer. Tuck it away and wait for the bigger reward while earning a generous dividend return.