March 25, 2015 Last Updated 10:33 am

Postmedia gets ‘no-action letter’ from the Competition Bureau regarding Sun Media acquisition

Press Release:

TORONTO, Ontario – March 25, 2015 — Postmedia Network Canada Corp. announced today that it has received a no-action letter from the Competition Bureau of Canada in respect of the Company’s previously announced agreement to acquire Sun Media Corporation’s English language newspapers and specialty publications, as well as digital properties, from Quebecor Media Inc.. The no-action letter confirms that the Competition Bureau does not, at this time, intend to challenge the proposed transaction before the Competition Tribunal under the merger provisions under the Competition Act.

toronto_sun-200“This is an exciting day for Postmedia and for the future of Canadian media,” said Rod Phillips, Chair of the Board of Postmedia. “We appreciate the Competition Bureau’s professional and thorough review and its conclusion that the proposed transaction is unlikely to substantially lessen or prevent competition.”

“We look forward to soon welcoming the Sun Media brands and employees to Postmedia,” said Paul Godfrey, President and CEO. “We are confident that our audiences and advertisers will continue to benefit from the strength of their favourite brands and that Postmedia will be poised to better compete against foreign-based digital giants that have been disrupting the Canadian media landscape at the peril of distinctive Canadian voices.”

As previously announced, the Company has completed two financing transactions in connection with the financing of the Sun Media Acquisition. On October 31, 2014, it issued $140 million of debt subscription receipts to an existing debt holder, which receipts are exchangeable for an equal amount of the Company’s 8.25% Senior Secured Notes due 2017 (the “Notes”) upon closing of the Sun Media Acquisition, without further consideration, subject to certain conditions. On March 17, 2015, it completed its rights offering (the “Rights Offering”) of equity subscription receipts (the “Equity Subscription Receipts”) for aggregate proceeds of $173.5 million. The Equity Subscription Receipts will be automatically exchanged for variable voting shares of the Company upon the satisfaction of certain conditions, including, among others, the satisfaction of all conditions of the Sun Media Acquisition and the issuance of the Notes. The net proceeds from the issuance of the Notes and from the Rights Offering, together with the net proceeds related to the sale of the Montreal Gazette production facility and corporate cash, will be used by the Company to finance the Sun Media Acquisition.

The transaction is subject to the satisfaction or waiver of customary closing conditions, and is currently expected to close in the next few weeks. There can be no assurance that the Company or Quebecor Media Inc. will be able to satisfy or comply with these conditions.

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