‘Ottawa’ Fairfax Financial Boosts Stake in Torstar Corp to 27% as Stock Price at Record Low
Torstar Corp., owner of Canada’s largest-circulation newspaper, gained the most in a month after investor Prem Watsa boosted his stake with the stock at a record low.
Watsa’s Fairfax Financial Holdings Ltd. bought another 4.9 per cent of Torstar for $5.3 million, bringing its holdings to 27 per cent of the non-voting shares, the firm said in a statement Thursday night. Torstar, which owns the Toronto Star and a portfolio of specialty websites, gained 5.9 per cent to $1.52 at 10:50 a.m., after hitting a record low Thursday in Toronto.
Torstar has lost nearly half its value this year as revenue shrinks amid advertising declines and disappointing progress on its digital tablet edition. The company has tried to cut costs, shutting down its printing plant in January and firing nearly 50 newsroom employees earlier this month. Still, revenue in the quarter that ended June 30 was down 14 per cent to $156.7 million. Chief Executive Officer David Holland plans to retire before the end of the year.
The shares were acquired for investment purposes, Fairfax said in the statement. The Toronto-based insurer, the biggest holder of the non-voting B shares, bought stock in June at $1.77 a share and again Thursday at $1.40 apiece. Paul Rivett, president of the Toronto-based holding company, didn’t immediately respond to requests seeking further comment.
Torstar has fallen about 90 per cent since Fairfax first invested in September 2006, when the publisher was trading around $20 a share. It took a $175 million loss on its stake in 2008 and 2009, according to a 2010 letter to shareholders.