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Vive le Sun!

Multi-national printing giant Quebecor emerged as Sun Media's white knight yesterday, fending
off a hostile bid by arch-rival Torstar.
The $983-million super-deal -- $21 cash for each Sun Media share -- all but kills Torstar's plans to
control retail print advertising in Canada's largest market.
One of Canada's biggest newspaper mergers came down to a few lines scribbled on a single
sheet of paper Tuesday.
The crumpled note is a bare-bones instruction manual for putting together a new Sun Media-
Quebecor alliance, which still doesn't have a name.
"Here it is. Here is where we worked it out," said Quebecor's Charles Cavell, appointed chairman
of the new board, as he held up the paper yesterday with hen-scratched numbers and words
penned on one side.
"When we come together as a new company, we are clearly the second largest publisher in the
country," he boasted, noting National Post publisher Southam is No. 1 -- "for now."
The linkup is expected to be a powerhouse in national advertising and likely to double Sun
Media's current lineage.
Quebecor -- a global family-built business empire with 37,000 employees and stratospheric
revenues of more than $7 billion -- now owns a chain of papers, including Le Journal de Montreal,
Le Journal de Quebec, The Sherbrooke Record and The Winnipeg Sun. It buys more paper than
any other company in the world.
'JUST THE BEGINNING'
It could now link up with the power of Sun Media, which publishes 15 popular dailies and scores
of weeklies and runs CANOE, the country's largest online news provider.
"Together we will form the most dominant force in this country in newspapers," said Paul Godfrey,
the Sun Media CEO who will hold the same post in the newly formed publishing division.
"This is just the beginning ... we are going to continue to put the footprint of our company in other
cities, in other places," a teary-eyed Godfrey vowed, as his wife and children looked on. "This
company cannot be stopped."
As well as a likely bitter defeat for Torstar -- whose executives fired out a press release yesterday
reiterating its offer -- the script he and Cavell penned translates into a windfall for Sun Media
shareholders. Quebecor is dangling a $21 all-cash offer for outstanding Sun shares, which closed
at $20.95 yesterday.
Sun Media's board of directors has unanimously approved the offer and said it will recommend
the bid to shareholders.
Quebecor's offer is scheduled to be mailed Dec. 18 and, depending on any possible counter-
move by Torstar, could take effect in late January.
Quebecor has already lined up enough stock to kill the Torstar takeover -- almost 45% -- and Sun
Media officials have promised not to negotiate with any other bidder.
In fact, insiders say it was Torstar's peculiar strategy of increasing its bid Monday that finally
sealed the deal with Quebecor.
"It was the dumbest move Torstar could ever make. It amazed us," said one high-ranking official
involved in the Quebecor alliance, which, 11 days ago, was falling apart.
"There's no doubt the Torstar bid made this deal come together quicker," Godfrey said.
On Monday, Torstar upped its offer to buy out its most dynamic competitor. That plan included
$14.75 cash and 1/4 of a Torstar class B share for each Sun Media common share.
Yesterday's announcement at Sun Media headquarters was greeted with the enthusiasm of a
Stanley Cup winning goal.
"To our white knights," Godfrey said, toasting Cavell, his counterpart at Quebecor Printing Inc., as
well as Pierre Karl Peladeau, executive vice-president at Quebecor Printing Inc. and the son of
the late Quebec publishing giant, Pierre Peladeau -- a man whom Sun columnists all but
demonized when he tried to buy their chain two years ago.
At that time, Godfrey beat out the Montreal-based multinational by leading a management-led
buyout of Sun Media.
Now, Godfrey, drained from long days of negotiations, said Sun Media actually began talking with
Quebecor a day before Torstar "turned everything upside down" on Oct. 28 by making its initial
$748-million hostile bid.
Godfrey said he holds no ill-will toward Star brass, though the takeover bid took the shape of a
very personal battle. "They saw a great asset here. They wanted to be more like us,
unfortunately, we didn't want to be more like them."
EARLIER OPPOSITION
He said it's easy to understand the change of heart when it comes to Quebecor. "A couple years
ago ... we wanted to try to grab all the loose ends ourselves," Godfrey told staff.
"We didn't know who was out there and who wasn't ... and we put a team together. When you put
a team together, anyone who lines up against you are your opponents."
Peladeau, saying his father understood the emotional columns written against him two years ago,
now believes the time is right for the two companies to exist under one roof.
'GREAT DAY FOR CANADA'
"Today is a great day for Canada. It's a great day for both organizations," he said.
Peladeau said both Sun Media and Quebecor mirror one another in vision and work ethic.
"The only difference, for the moment, is we've been able to (beat) the broadsheet in the different
markets," he noted.
"We intend to grow the tabloid business because we believe it's a very good business."
Sun Media VP Trudy Eagan, a 24-year employee, said of the three weeks of talks with Quebecor:
"We love this company. We were determined to keep it intact."
"We're going to have a circulation that outruns any broadsheet in any market we're in," Cavell
said. "We're going to run a company that's efficient and good news for the investor."