Thomson eyes news group
The surprise entry of Thomson Newspapers Ltd. into the bidding war for one of Canada's two chains of large daily newspapers could bring about a major reshaping of the country's newspaper industry.
The Toronto-based company entered the competition on Wednesday with an offer of $139 million for ownership of FP Publications Ltd., which publishes eight dailies across Canada, including the Globe and Mail in Toronto, FP's flagship paper.
If successful, the Thomson bid would increase daily circulation of the company's 120 newspapers in Canada and the United States by about 50 percent -- to 2.4 million from 1.6 million.
Previously, the Thomson organization, which also owns the Times and Sunday Times of London in Britain, had stuck to a policy of buying small and medium- sized dailies in North America. For this reason, no one expected the company to try to take over the large dailies owned by FP in Canada.
Thomson and its Canadian subsidiaries now own 36 dailies in smaller towns across canada, plus 12 Canadian weeklies. Acquisition by Thomson of FP, one of the country's two major chains of large dailies, would further concentrate ownership of the country's newspapers.
This aspect of the Thomson bid has already drawn the attention of the federal government's anti-combines branch. Robert Bertrand, a combines official in Ottawa, said the government has begun a preliminary study of the proposed takeover by Thomson, which Mr. Bertrand said "may raise some competition issues."
The most recent offer for FP follows one by Toronto financier Conrad Black, chairman of Hollinger Argus Ltd. and part owner of the Vancouver-based Sterling Newspapers Ltd. chain. Mr. Black, along with three partners, bid a reported $ 120.3 million for FP.
Another offer has come from R. Howard Webster, chairman of the Globe and Mail Ltd., who is willing to put up $109 million for the chain, which includes substantial printing interests in addition to newspapers.
FP is a private company with only five voting shareholders. There was no immediate reaction to the Thomson offer from any of the FP owners. However, it was announced that the shareholders would meet in Toronto within the next week to discuss the bids.
John Bassett, chairman of Baton Broadcasting Inc. of Toronto and a partner in the Black group, seemed to think the latest offer settled the issue.
He said it was unlikely that the Black group would make a higher bid and added that it would be ridiculous to get into a bidding fight with Kenneth Thomson, chairman of the Thomson chain.
"All I'm going to do is congratulate Mr. Thomson," said Mr. BassetT." He's a lot richer than we are."
Many in Canada were surprised by the possible shift by Thomson to large dailies. St. Clair McCabe, Thomson president, said the company had bought smaller publications in the past but said, "More importantly, we are in the newspaper business, and that's the only business we're in. Obviously, if Canadian newspapers become available, we'll make an offer."
The Thomson bid is for all of the issued and outstanding shares of FP, at $4, 000 a share for the voting shares and $2.50 a share for equity shares. The offer expires Jan. 11.
The shareholders of FP are the John Sifton Estate of Winnipeg, Manitoba; Starlaw Investments Ltd; Max Bell Foundation; Newsco Investment Ltd; and Richard S. Malone, chairman of FP.
The chain's dailies include the Ottawa Journal, Winnipeg Free Press, Victoria Daily Times, Victoria Daily Colonist, Calgary Albertan, Lethbridge Herald, and Vancouver Sun.