Postmedia lists on TSX without IPO

In a move considered “highly unusual”, Postmedia, owners of The National Post, has been listed on the Toronto Stock Exchange without an initial public offering (IPO).

In an article published by the Toronto Star’s, Josh Rubin spoke with professor Louis Gagnon, who hasn’t witnessed a “similar maneuver” in his 20 years of studying the IPO market. “It tells me one of two things,” he told Rubin, “That they approached underwriters and were told no, or that an underwriter expressed interest, then found they wouldn’t be able to sell the offering.”

Postmedia was created when a group of its unsecured creditors bought the publishing and online assets of troubled media company Canwest Global Communications Corp. for $1.047 billion. As condition for the deal, the company needs to be TSX-listed by July 2011.

A story by the Finacial Post (owned by Postmedia) reports:

“Postmedia Network has eyed a potential listing since the deal closed last summer in part in order to diversify its shareholder group and increase the equity held by Canadian owners. The move is required in order to continue allowing advertisers to write down ad costs permitted under Canadian tax law.

“The non-offering prospectus does not provide a valuation on Postmedia Network shares, however, an executive compensation plan detailing stock options lists the strike price of those options at $9.86 a share. ”

Gagnon thinks the current owners are looking for a way out,
telling Rubin: “It’s an exit strategy. Not the quickest one, but it’s definitely an exit strategy.”