Postmedia Network acquires Sun Media English language newspapers and digital properties

Postmedia Network Inc. (Postmedia) completed the acquisition of Sun Media Corporation’s (Sun Media) English language newspapers and speciality publications, as well as digital properties including the Sun chain of dailies, consisting of The Toronto Sun, The Ottawa Sun, The Winnipeg Sun, The Calgary Sun and The Edmonton Sun, as well as The London Free Press and the free 24 Hours dailies in Toronto and Vancouver, from Quebecor Media Inc. (the Sun Media Acquisition). The purchase price was $316 million in cash less $10.5 million for customary adjustments and adjustments related to real estate properties sold by Sun Media prior to closing.

In connection with the closing of the Sun Media Acquisition, Postmedia Network Canada Corp. (PNCC), the holding company that owns Postmedia, issued 240,972,226 variable voting shares in exchange for equity subscription receipts issued in connection with the previously announced rights offering (the Rights Offering), for aggregate proceeds of $173.5 million. GoldenTree Asset Management LP (Goldentree) backstopped the Rights Offering pursuant to the standby purchase agreement entered into with PNCC. In addition, PNCC has issued $139,303,000 of its 8.25 per cent Senior Secured Notes due 2017 (the Notes) in exchange for debt subscription receipts issued in October, 2014, in contemplation of the transaction. The net proceeds from the issuance of the Notes and from the Rights Offering, together with the net proceeds related to the sale of the Montreal Gazette production facility and corporate cash, were used by PNCC to finance the Sun Media Acquisition.

Postmedia was represented internally by its in-house legal team led by Jeff Haar which included Gillian Akai, Brenda Lazare and Megan O’Toole and was assisted by Goodmans LLP with a team led by Dale Lastman and Michael Partridge that included Mark Spiro, Geoff Cowper-Smith, Shazia Banduk and Danny Wakeling (corporate); Celia Rhea, Michael Bertrand and Ada Tien (banking); Carrie Smit and Kabir Jamal (tax); Calvin Goldman, Michael Koch and Richard Annan (competition); Thomas Macdonald (real estate); Joel Schachter (regulatory) and Amalia Berg (IP). Terra Klinck, Paul Broad and Natasha Monkman of Hicks Morley LLP acted as employment, labour and pension and benefits counsel to Postmedia. Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as US corporate counsel to Postmedia for the Rights Offering. The Paul, Weiss team comprised Chris Cummings and Ronnie Ollo (corporate) and David Mayo and Rodney Hill (tax). 

Quebecor Media Inc. was represented internally by its in-house legal team led by Marc Tremblay and Christian Marcoux which included Bernard Pageau, Dominique Poulin-Gouin and Louis-François Hogue and was assisted by Fasken Martineau DuMoulin LLP with a team led by Niko Veilleux that included Robert Paré, Joëlle El-Féghali, Constantinos Ragas,Lénie Tessier-Beaulieu and Alexandra Lazar (corporate), Claude Jodoin (tax), Jean-Nicolas Delage and Paul Gagnon (IP), Pierre-Olivier Charlebois and Delphine Pittet (environment), and Peggy McCallum and Ralph Nero (employment and pensions). Kevin Ackhurst and Denis Gascon of Norton Rose Fulbright Canada LLP acted as competition counsel to Quebecor Media Inc. Denis Gascon has since been named to the Federal Court of Canada and Chair of the Competition Tribunal.

Goldentree was represented by Brian Pukier and Jeff Hershenfield, both of Stikeman Elliott LLP.