Globe: National Post CEO working to buy Canwest papers

By The Canadian Press

TORONTO - Canwest Global Communications Corp. shares (TSX: CGS.TO) rose to their highest level since May following a report that National Post chief executive Paul Godfrey has lined up financial support for a bid on Canwest daily newspapers.

When contacted by The Canadian Press on Friday, Godfrey declined to discuss the report and a Canwest spokesperson denied the newspapers are for sale but Canwest shares remained dramatically higher than they have been for months.

At midday, Canwest shares were at 26.5 cents, up six cents or nearly 30 per cent, amid heavy trading on the Toronto Stock Exchange. Earlier, the stock hit 30 cents, which was the highest intraday price May 21.

Canwest spokesman John Douglas said Canwest's papers aren't for sale adding: "The papers are part of the Canwest company and this story is pure speculation."

He was referring to a report by Canwest rival Globe and Mail that said Godfrey has been approached by private equity funds that want to buy some or all of Canwest's papers.

The news report said unidentified sources expect the papers to be put up for auction within two months.

Godfrey had little to say about the report, when contacted by The Canadian Press.

"As far as I'm concerned... I'm employed at Canwest and I'm loyal to Canwest," Godfrey said in a phone interview. "I have nothing further to say than that."

There has been widespread speculation about the fate of Canwest as the Winnipeg-based media company works to sell assets to free itself from a huge debt load, largely taken on to acquire the former Southam newspapers from a company controlled by former media baron Conrad Black.

Godfrey took the reins at the National Post in January after leaving his post as president and CEO of the Toronto Blue Jays.

Before joining the Jays, Godfrey headed a 1996 management-led buyout of what was then the Toronto Sun Publishing Corp., which was later purchased by Montreal-based Quebecor Inc. (TSX: QBR-B.TO) and became Sun Media.

The once-lucrative North American newspaper and television industries have been hit hard in recent years, not only because of the recent economic slowdown but because of increased competition for ad revenues and audience.

Canwest, which is a publicly traded company controlled by the Asper family through their special voting shares, has been struggling to extricate itself from about $2.5 billion owed to its creditors.

The Winnipeg-based company, which also owns the Global television network, has been able to restructure its operations and finances without seeking court protection from creditors, even though Canwest has defaulted on debt payments.