TORONTO - A private investment company that is a major backer of Postmedia Network Corp. has agreed to provide financing for NordStar Capital's acquisition of Torstar Corp., the owner of the Toronto Star and other newspapers.

NordStar said in a statement it considered several sources of outside funding and chose Canso Investment Counsel Ltd. because of its experience in the Canadian media industry.

The statement also addressed long-standing speculation that there might be a move afoot to merge Torstar and Postmedia, which own two of the country's biggest media businesses.

"The financing arrangements for the NordStar bid are not, in anyway whatsoever, connected directly or indirectly with any other media company."

Canso didn't immediately respond to a request for information about its involvement with the NordStar deal.

However, talk of an eventual deal to consolidate Canada's newspaper industry was fuelled by the involvement of Canso — which provided $93.5 million after fees in September for a refinancing of Postmedia's debt.

NordStar's statement said it didn't include Canso in the initial press release but "their participation would have been disclosed in due course as part of customary public fillings."

NordStar is a new company formed by Toronto businessmen Jordan Bitove and Paul Rivett, whose backgrounds are in corporate finance.

In order to buy Torstar, they required the support of five families that have controlled the company for decades — the Atkinsons, Hindmarshs, Campbells, Thalls and Honderichs.

The five stepped in to run the Star after founder Joseph Atkinson died in 1948, leaving the paper to a charitable foundation to be run by trustees.

In announcing the deal on Tuesday, Torstar chair John Honderich said it was "time to pass the torch."

Unifor national president Jerry Dias says his big concern is that Canada could lose the Toronto Star's voice for the progressive social issues if it's combined with the company that owns the National Post, which has taken a more conservative stance.

"Let's be candid, people are nervous with Canso being the money behind the National Post and now the Star. For us, the broader issue is how comfortable are we eliminating progressive voices in this country? That's what the big issue is."

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Torstar holds an investment in The Canadian Press as part of a joint agreement with subsidiaries of the Globe and Mail and Montreal's La Presse.

— with files from Tara Deschamps

This report by The Canadian Press was first published May 29, 2020.

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