Canwest Global Communications has approved the sale of its newspapers to a group led by National Post president Paul Godfrey in a $1.1 billion deal that preserves jobs and pays off the insolvent company's bankers.
The buyer of Canwest Limited Partnership is a group of the media company's bond holders, who are paying $950 million in cash as part of Monday's transaction.
The deal was deemed superior to other bids received by the company for its newspapers, Canwest said in a release late Monday.
The bid is slated for approval by a bankruptcy court next Monday and is expected to close in mid-July.
The transaction is expected to provide enough cash to pay off the banks, which were owed about $925 million.
As well, Canwest said the offer "also maintains all existing newspaper operations and will provide continuing employment to all existing full-time employees and substantially all part-time employees of the LP Entities. In addition, the new company will maintain all employee pension and benefit plans."
Godfrey is the former CEO of Sun Media and current president of the National Post. He also used to run the Toronto Blue Jays as a senior executive with Rogers Communications, the baseball club's parent.
Canwest LP owns and operates daily newspapers across the country, including the Montreal Gazette and Ottawa Citizen, as well as more than 20 community newspapers, online operations and other publications.
The deal also includes the Post, the flagship paper in the Canwest group.
Canwest spokesman John Douglas said the Godfrey-led transaction preserves the heart of the newspaper operations.
"We entered creditor protection looking to preserve the strength and value of the assets, position them well for the future, and protect employees and come out with an outcome that was in the best interests of all stakeholders," Douglas said in an interview from Canwest's head office in Winnipeg.
"What you see today is a bid led by Mr. Godfrey that is more money than others would have otherwise expected, ensures that all the full-time employees maintain their jobs, ensures that often century-old newspapers continue to operate, serving the communities that they always have, and positions the newspapers very well for future growth."
The banks that currently own Canwest's newspapers had set a floor price of $950 million for the newspapers.