Newspapers could fetch a billion

Canwest Global Communications could fetch more than $1 billion for its newspaper assets — including the National Post — as signs of life in the finances of the newspaper industry drive up interest in acquisitions, industry observers suggest.

TORONTO — Canwest Global Communications could fetch more than $1 billion for its newspaper assets — including the National Post — as signs of life in the finances of the newspaper industry drive up interest in acquisitions, industry observers suggest.

Chris Diceman, an analyst at Dominion Bond Ratings Service, believes if Canwest moves ahead with rumoured plans to sell its newspapers, it could pull in between $600 million and $900 million for the lumped together assets in a first round of bids.

“If there was a bidding war for these assets either in, or part of, creditor protection, that multiple may go up even higher than that,” he said Thursday.

It’s an optimistic tone for an industry that just a year ago seemed like it was near death as North American media corporations grappled with lower advertising revenues and declining readership in a deepening recession.

One analyst, who asked to remain anonymous, said that the National Post is considered a money-loser and that Canwest would want to lump it in with other more profitable papers in order to get it sold.

“The Post itself has been carried in all analysts valuations at either $0 or some nominal value of between $10 and $20 million bucks,” he said.

“Canwest hasn’t really made a go at making that thing sustainably profitable.”

He estimated the company could receive $1 billion to $1.4 billion for the newspapers.

Diceman said as optimism develops in the media industry there could be more interest for the newspaper division.

“All newspaper companies have to really take a close look at where these businesses will be after the economy improves,” he said.

“A lot of the companies have taken this opportunity to adjust their cost base which should put them on better footing for those incremental structural changes that should happen over the next couple of years.

Included on that list are names like Torstar Corp. (TSX:TS.B) and Black Press.

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