Torstar’s prospective owners seek ‘ways to grow’
Bitove, Rivett say they’re keen to build on Star’s progressive tradition
“The progressive reporting is what we support, and quite frankly, that’s exactly why we brought David (Peterson) in. Someone with an incredible reputation who lives those values every day.”
JORDAN BITOVE
The new prospective owners of the company that publishes the Toronto Star, as well as the St. Catharines Standard, Welland Tribune and Niagara Falls Review, would like to clear a few things up.
They’re not hard-core rightwingers determined to turn the country’s biggest progressive media voice into a conservative one. They’re not mercenary private equity guys who are going to cut reporting resources to the bone. And most of all, they’re devoted to the Star’s Atkinson Principles of progressive social values and nation building.
“We are not taking the Star in any different political direction than where it is today,” said Jordan Bitove, who along with Paul Rivett formed Nordstar Capital in order to buy Torstar for $52 million and take it private. (The purchase must still officially be approved at a meeting of Torstar shareholders in mid-july.)
To keep the Star true to its progressive roots, Bitove and Rivett brought former Ontario Liberal Premier David Peterson on board and intend to make him vice-chair once the takeover is complete. Bitove and Rivett say they might share the role of chair.
That move was no coincidence, Bitove said.
“The progressive reporting is what we support, and quite frankly, that’s exactly why we brought David in. Someone with an incredible reputation who lives those values every day,” he said.
Peterson said if he thought Bitove and Rivett were about to swing the Star’s political perspective to the right, he wouldn’t have signed on.
“Over my dead body. These guys didn’t bring me in because I’m pretty. I know them. These aren’t partisan, mean-spirited people. This isn’t the United States. It’s not that kind of thing. But I’m going to be very involved in this and I have responsibilities. One is to maintain the Atkinson Principles. I believe them, and these guys believe in them,” said Peterson.
Rivett, who stepped down in
February as CEO of Fairfax Financial, acknowledged having made a donation to the Conservative Party of Canada leadership campaign of then Tory Maxime Bernier, but insisted he’s not politically partisan.
“There’s going to be an attempt to vilify me, but I am not political … What I am is a businessperson. We are investing in Torstar because of the progressive nature of the paper and the subscriber base it has. We will do nothing to jeopardize that,” said Rivett, adding that he and Bitove don’t intend to hack and slash their way to success.
“You can’t grow revenue on the back of cuts. We don’t subscribe to cutting. But that said, we support management and we support (Torstar CEO) John Boynton and the team. So there’s no current focus on that.
Our current focus is that we’re excited to bring new potential revenue sources and partners to the business and find ways to grow, not cut,” said Rivett, who wouldn’t rule out more acquisitions eventually.
That came as little surprise to former investment banker and private equity veteran Wayne Adlam, now a finance lecturer at Western University.
“They probably saw value at current (share price) levels. But I can’t see them buying it to just run the Star and community papers as is. So I would think somewhere within, there’s a sense that somewhere a consolidation can drive value,” said Adlam.
Bitove and Rivett declined to comment on the source of the funding for the acquisition, and the $52-million purchase price is a fraction of what Torstar’s value would have been a decade ago.
However, Bitove said it wasn’t a case of Nordstar swooping down and taking advantage of an already struggling company being pushed down further because of COVID-19.
“It was about a year and a half ago when I really started paying attention to Torstar. And then I reached out to (John) Boynton and (Torstar chairman John) Honderich at the very beginning of February, and just asked them … I’d read about the dividend not being paid out, and some of the other challenges they were having, and that got the conversation going … I met with the voting trust PRE-COVID, honestly, when it was what was going on in China,” said Bitove.
In an interview, Honderich agreed that the initial unsolicited approach by Bitove came before the global pandemic had become a huge economic factor in Canada, but acknowledged that its toll played a role in the decision to sell. “Would it be fair to say that COVID had an impact on our thinking? Absolutely. But the bid came in before COVID,” Honderich said.
While Rivett’s former employer Fairfax Financial held roughly 40 per cent of Torstar’s shares at the time of the agreement, Honderich said Nordstar’s was the only bid on the table.
“I don’t want to speculate. Could there have been other suitors? Absolutely. This was the offer we got. Clearly Fairfax has had an interest in Torstar given the number of shares they’ve got. But they did not put forward a bid,” said Honderich, whose family is one of five families that control almost all of Torstar’s voting shares.
Those five families form the “voting trust.” While he wouldn’t describe the deliberations of the voting trust, Honderich said Nordstar’s respect for the Atkinson Principles played a crucial role in the sale, even if they weren’t written into the sale agreement.
“It’s very hard to put into a contract (anything) about operating according to principles and values. They don’t lend themselves to contracts in the same ways as dollars and cents. But Jordan came and spoke to both the voting trust and the board, and spoke eloquently about his commitment. They’ve put markers down publicly that they’re committed to do that,” said Honderich, who acknowledged he was “highly emotional” when he signed the agreement.
“Obviously this decision was a long time in coming. It wasn’t rash, I didn’t do it suddenly. But obviously, signing the document was a highly emotional moment …You work 44 years for a place and then you end the association, it gets to you. And it certainly got to me,” he said.