Carving up Osprey Media turning out messy for Quebecor and Torstar

A cosy deal to carve up the Osprey newspaper and magazine empire seems to have gone badly awry as Torstar Inc. has cried foul about Quebecor Corp.'s purchase of all the assets, including such venerable newspapers as the St. Catharines Standard and the Kingston Whig-Standard and a clutch of magazines.

According to a story in the Globe and Mail, the two conglomerates agreed in late 2005 to divvy up the titles; Quebecor later backed out of the deal, or says it did. But in filings by Quebecor with securities regulators, Torstar is said to be contending that Quebecor didn't terminate the agreement and Torstar continues to have the right to acquire pieces of Osprey. Torstar has refused to comment.

Though Torstar isn't named specifically in the filings, Quebecor confirmed yesterday Torstar is the company referred to as "the Joint Bidder" in the regulatory filings.

The regulatory filings indicate Quebecor chief executive officer Pierre Karl Péladeau and Torstar CEO Rob Prichard sent numerous letters to each other arguing the matter.

"The chief executive officers of the Joint Bidder and [Quebecor] exchanged several letters wherein the Joint Bidder asserted that [Quebecor] had not terminated the 2005 agreement," the documents say.

"In the course of 2006, [Quebecor] considered several new proposals put forward by the Joint Bidder relating to [Osprey], but none of these resulted in any new agreement."

Sources indicate Torstar is arguing that the wording of a letter sent by Quebecor announcing it was pulling out of the agreement suggested the two sides would be working together in the future.

Torstar has interpreted that as an indication the Osprey agreement is still intact.