Southam Buys 'Financial Post'

Conrad Black, who already controls more than half of Canada's daily newspapers, acquired the nation's leading business daily Monday to reduce the competition for a new national newspaper he plans to start in October.

Black's Southam Inc. announced that it will obtain the Toronto-based Financial Post from Sun Media Corp., which will receive four Ontario daily newspapers in return.

Southam said the deal would strengthen the prospects for its new, as-yet-unnamed national newspaper, but did not elaborate, Some analysts suggested the Post might be incorporated into the new paper as its business section.

Four Ontario dailies owned by Southam - the Hamilton Spectator, the Kitchener-Waterloo Record, the Guelph Mercury and the Cambridge Reporter - will become Sun Media papers. In exchange, Southam gets Sun Media's 80 percent interest in the Financial Post and 150 million Canadian dollars (US$101 million).

"This decision was made with very strong and mixed emotions ... but it's something we had to do," Sun Chairman Paul Godfrey told staff members of the Post and the tabloid Toronto Sun in the Toronto building shared by the two papers.

Black's companies control 61 of Canada's 105 daily newspapers, but so far he has had no holdings in Toronto, the country's largest city. The new newspaper, which will be based in Toronto, is planned in part to fill that void, though it will circulate nationwide.

The Financial Post has a daily weekday circulation of 100,000 and weekend circulation of 200,000, coast to coast. The four Ontario papers being transferred to Sun Media have a total daily circulation of 200,000.

Worldwide, Black controls more than 150 dailies, mainly in Canada and the United States. His flagship papers are the Daily Telegraph in London, the Jerusalem Post and the Chicago Sun-Times.

The Southam-Sun Media deal is subject to regulatory and shareholder approval and is expected to close by early September.

Written By David Crary