Osprey Media bought by Quebecor

Quebecor Media has purchased Osprey Media Income Fund for $517 million.

Michael Sifton put together the Osprey Media chain of newspapers and magazines out of the smaller dailies and weekly newspapers and magazines that CanWest Media either didn't want or wanted to sell to pay down debt from buying Conrad Black out of his Hollinger empire. In all, Sifton's company bought 54 newspapers, including the St. Catharines Standard, Peterborough Examiner and the Kingston Whig-Standard. Along with them, he acquired some local magazines, one national title (Vines magazine) and later added the Town Media group out of Hamilton (flagship: Hamilton magazine).

He very profitably converted this tidy empire into an income trust and, for a time, was very successful, according to a story in the Globe and Mail.

Backed by venture capital supplied by the Ontario Teachers Pension Plan and Bank of Nova Scotia, the strategy was to build an empire of small Canadian papers that would churn out consistent payouts to investors. But fierce competition in Ontario from Toronto-based Torstar Corp. has sent the units tumbling nearly 45 per cent to $5.55 since their debut.

The sale brings to an end more than a century of newspaper publishing for the Sifton family. Mr. Sifton is great-grandson of Sir Clifford Sifton, a federal cabinet minister who bought the Winnipeg Free Press in the 1890s.

Stalling revenues meant that the company had to cut its distribution to unit owners in late 2006. Then it was hit with another whammy as the federal government announced that it was going to eliminate the tax advantages of the trusts by 2011. Speculation immediately began that the company was on the block and, in March, Sifton confirmed this. However the smart money was on the possibility of Torstar Corporation buying the chain to add its stronger properties to the ballooning Metroland chain. In fact, it has been fierce competition from Torstar that had helped, in part, to pare down revenues for Osprey and put it in play.

Quebecor paid the equivalent of $7.25 a share, a 30.6-per-cent premium over the closing price of the units on March 5, before Osprey announced it was reviewing its strategy.

Essentially, the purchase means that the Osprey papers will be rolled into what is sometimes called the Sun chain, although it includes Le Journal de Montreal and Le Journal du Quebec, the London Free Press as well as the Suns in Toronto, Ottawa, Calgary, Edmonton and Winnipeg. As well, Quebecor owns a chain of free daily commuter papers under the flag 24 Hours.