Merger talks between Postmedia, Nordstar called off

A headline-grabbing merger between media giants Postmedia Network Canada Corp., and Nordstar Capital LP won’t happen after both companies confirmed in releases Monday that they were unable to agree on terms of the proposed deal.

Nordstar owns the Metroland Media Group and the Toronto Star, while Postmedia owns hundreds of brands including the National Post, the Financial Post and the Toronto Sun.

In a release Postmedia confirmed that merger talks have “ceased.”

“The need for creative solutions and foundational transformation in our industry remains,” Andrew MacLeod, president and CEO of Postmedia said in a statement.

“Our continued focus is on protecting and ensuring Canadians’ access to reliable information. By leveling the playing field with the tech giants and creating a healthy ecosystem, we can ensure that the media industry and journalism remain vibrant, diverse, and resilient in Canada.”

Under the original plan, Nordstar would have had a 50 per cent voting interest and 44 per cent economic interest, while Postmedia shareholders would have had a combined voting interest of 50 per cent, and a combined economic interest of 56 per cent.

Torstar Corp., added that the backdrop of regulatory and financial uncertainty contributed to the talks being called off.

The two companies announced in late June that they were in talks to merge in a deal that would have seen Postmedia and Metroland Media Group combine forces while the Toronto Star would be managed by a new company.

They had said the proposed deal would help them scale up in order to respond to the “existential threat” facing the media industry.

But experts sounded the alarm over what such a deal could do for local news coverage and for competition in journalism.

Postmedia laid off 11 per cent of its editorial staff earlier this year.

With files from Alejandro Melgar