January 18, 2010 / 4:16 PM / in 8 years

Bidder for Canwest newspapers says well-financed

VANCOUVER, British Columbia (Reuters) - A group of bidders for three well-known Canadian newspapers owned by debt-laden Canwest Global Communications Corp has strong financial backing from six individuals and it is a serious bid, one consortium member said on Monday.

<p>The office of The Gazette is seen in downtown Montreal, January 18, 2010. REUTERS/Shaun Best</p>

The consortium, which includes former Canadian Senator Jerry Grafstein, said earlier it is busy preparing a bid for the Montreal Gazette, the Ottawa Citizen and Canwest’s flagship National Post.

No offer price is being made public yet, said Quebec-based magazine and radio journalist Beryl Wajsman, who along with former Global TV executive and Montreal Star editor Raymond Heard is the third promoter of the bid for the daily newspapers.

“The people in our bid are substantial enough to go through the process,” Wajsman told Reuters in an interview, but declined to name the financial backers.

No public companies are involved in the bid, he said.

He dismissed speculation that the offer was merely an attempt to push up the price of the assets. Consortium member Heard, a South African by birth, is a long-time adviser to the Asper family. Winnipeg-based Canwest was founded by Izzy Asper and is now headed by his son Leonard.

“We are not stalking horses for anyone. We are not doing this to be a magnet for money ... I assure you,” Wajsman said.

Canwest, Canada’s biggest media company, filed for bankruptcy protection for parts of the company last October, weighed down by some C$4 billion ($3.9 billion) in debt and hurt by a slide in advertising revenue.

Earlier this month its newspaper unit, excluding the National Post, also filed for court protection.

Canwest spokesman John Douglas declined to comment on the impending bid but said Canwest has indicated that offers for the entire company will be given preference over bids targeting specific assets.

The bidding consortium said it plans to begin a due diligence process in the next few weeks. Wajsman said that would take about 45 days.

A group of lenders, owed money by Canwest and representing Canada’s five biggest banks, has offered to acquire Canwest’s newspaper group for about C$925 million.

The lenders, led by Bank of Nova Scotia, are not expected to hold on to the newspapers if a higher bid is forthcoming.

Simultaneously Canwest has hired investment bank RBC Capital Markets to search for superior offers for the unit, which also publishes the Calgary Herald, Vancouver Sun and several community newspapers and media websites.

“You will see a number of small bids like (today’s consortium bid) for select pieces,” said Chris Diceman, senior vice-president of rating agency DBRS Ltd, which has tracked Canwest’s debt.

“The adviser’s option A is to sell it is as whole. Secondarily they will look at options such as these,” Diceman said.

Other possible buyers of the newspaper assets include Torstar Corp, publisher of Canada’s biggest daily, the Toronto Star, and media and communications company Quebecor Inc.

The list also includes Transcontinental Inc, FP Newspapers LP and Glacier Media. A management buyout and union participation are also possibilities.

Wajsman said he had heard of two other groups -- one in British Columbia and another in Alberta -- that are keen to make a bid for Canwest newspapers in their markets. He declined to name them.

($1=$1.025 Canadian)

Additional reporting by Euan Rocha; editing by Rob Wilson

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