Toronto Hedge Fund Takes Big Stake In Sun-Times Parent

Date: Wednesday, May 21, 2008
Author: Mark Fitzgerald, Editor and Publisher.com

Polar Securities, a Toronto-based hedge fund, disclosed Tuesday that it has purchased a big stake in troubled Sun-Times Media Group (STMG).

In two filings with the U.S. Securities and Exchange Commission (SEC), Polar said it has made big purchases of the stock in recent days, and now owns 8,718,163 shares of STMG common stock, or approximately 13.3% of shares outstanding.

Among the Polar entities making the buys is South Pole Capital, which Polar's Web site describes as a "Canadian distressed securities fund."

STMG, publisher of the Chicago Sun-Times and dozens of other Chicago-area publications, has said it is exploring strategic alternatives including the sale of all or some of the company.

STMG shares were de-listed from the New York Stock Exchange earlier this month and now trade over-the-counter on the Pink Sheet. Shares of the stock (OTC: SUTM.PK) were trading in the early afternoon at 42 cents, down 1 cent, or 2.33%, from its opening.

Polar is headed by Canadian John Paul Sabourin.

STMG Director of Investor Relations confirmed the size of the stake, but declined further comment.

Hollinger Inc., a now-insolvent holding company that Conrad Black used to control a world-wide newspaper empire, is the controlling shareholder in STMG. Through super-voting shares, it has a 70% voting stake and about a 19% equity stake. Under an agreement with STMG, those shares will be converted to common shares next month, and the management group that has run Hollinger during its court supervision will become an approximately 20% stakeholder.

Mark Fitzgerald (mfitzgerald@editorandpublisher.com) is E&P's editor-at-large.