TORONTO (Reuters) - An Ontario court gave potential bidders for the newspaper assets of Canwest Global Communications Corp an extra week on Tuesday to make their offers, after a group of noteholders complained the media company’s sale plan was “fatally flawed”.
Parties interested in some of Canada’s best-known newspapers, including the National Post, Montreal Gazette and Vancouver Sun, now have until March 5 to produce bids to top a C$925 million ($873 million) offer made by a group of Canwest’s lenders.
Canwest, Canada’s biggest media company, also agreed to remove a veto that lenders had on bids for the newspaper assets. Instead, a court-appointed monitor will now decide which initial bids will go through to a final round.
Canwest filed for bankruptcy protection for its newspaper unit on January 8, weighed down by some C$4 billion in debt. Some of its television assets are also under court protection.
The extension comes after a group of noteholders complained in court that the company’s plan to sell its newspapers gave too much power to the a group of banks Canwest owes money to, while leaving other stakeholders out in the cold.
The timeline of the sale plan is “unnecessarily aggressive” and doesn’t give enough information to other interested parties, Ted Lodge, a partner of GoldenTree Asset Management LP, said in a court filing.
GoldenTree is part of a group of noteholders who own or manage more than US$300 million worth of Canwest notes.
Canwest owes a group of lenders, which includes Canada’s five big banks, around C$900 million. The group, which is led by Bank of Nova Scotia, offered on January 8 to acquire Canwest’s newspaper division for about C$925 million.
The offer is considered a stalking horse bid while Canwest’s investment bankers search for superior offers.
The court also extended Canwest’s bankruptcy protection on Tuesday to April 14 from February 5.
Reporting by John McCrank; writing by Nicole Mordant; editing by Rob Wilson