RE:RE:Why Consolidation Will HappenHi Penny,
Postmedia has been a disaster since inception and they have restructured their debt several times to get out from underneath ill-advised acquisitions and investments. Original shareholders got wiped out and the shares now in play are thinly traded and not representative of the value of Postmedia. Postmedia is much harder to place a valuation on because of its geographic dispersion and convoluted structure, but it does hold considerable value as part of a consolidation and rationalization play.
Quebecor is a non-starter as well as Transcontinental. They made a wise decision years ago to get out of the newspaper industry and Peladeau is too toxic a character to convince the Voting Trust he would be a worthy steward of the Toronto Star.
Fairfax is far and away the most obvious candidate to privatize Torstar and Postmedia. Fairfax owns 29 million shares of Torstar representing 36% of the outstanding equity. They also have an interest in Postmedia, but I haven't had the time to find the extent of their relationship. A large portion of Postmedia's $250 million in debt is held by Canso, which also owns a meaningful number of Torstar shares. It is a tangled web...
When consolidation happens it will be someone with deep pockets. It may not be Prem Watsa, but as evidenced in the US, billionaires can come out of the woodwork to rescue and rehabilitate newspaper companies. I do still think he has the values and character to be the best candidate to rescue Torstar from itself.
Torstar is simply too attractive an option to be overlooked and when the Voting Trust finally admits defeat, privatization will happen.
MW