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A pedestrian walks past the front of the National Post sign in Toronto on Feb. 27, 2009. Winnipeg-based Canwest, carrying a $3.9-billion debt load overall, is riding a deadline for renegotiating terms of a debt that represents a small portion of its total debt.

NATHAN DENETTE/Nathan Denette / CP

The sale of CanWest Global Communications Corp., the largest auction of media assets ever undertaken in Canada, is expected to hit a crescendo in the next few weeks as rival groups begin their fight to buy the company's newspapers.

Sources close to the situation say two leading consortiums have been formed to buy CanWest's chain of 46 newspapers in a deal that could see the winner spend as much as $1-billion.

Paul Godfrey, the president of CanWest's National Post newspaper and former chief executive officer of the Sun Media chain, is leading one consortium. Sources say he has joined with Vancouver-based phone directory company CanPages Inc., which is backed by U.S. private equity firm Hicks Muse Tate & Furst.

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The group also includes at least six top CanWest executives willing to run the operation if the bid is successful. "If you take the list of 10 top executives … at least six or seven of them are there," said one source familiar with the proposal. CanWest chief executive officer Leonard Asper is not said to be part of the plan.

CanPages CEO Olivier Vincent could not be reached for comment. His company purchased GigPark, a tech startup run by Mr. Godfrey's son, Noah Godfrey, last summer.

However, Mr. Godfrey's consortium will face stiff competition from a rival group that is said to include Vancouver-based Glacier Media Inc., a community newspaper business run by former investment banker Jon Kennedy. Glacier has stakes in 120 community papers and covets CanWest's community publications.

CanWest owns 11 large city papers, including the Ottawa Citizen, Edmonton Journal and National Post, and 35 small community papers. The assets were put up for sale in January when the newspaper division, known as CanWest LP, filed for protection from creditors.

Bank of Nova Scotia, which is leading the sale, has said only bids for the whole chain will be entertained, leading analysts to believe that the buyer will be a consortium.

"If one owner isn't interested in the assets as a whole … a consortium could be the way to go," said Chris Diceman, a senior vice-president at bond rating agency DBRS.

Torstar Corp., owner of the Toronto Star, is believed to be interested in acquiring the Ottawa Citizen, Montreal Gazette and National Post, but will likely have to find a willing consortium to join. Another piecemeal bid, led by retired senator Jerry Grafstein, covets those same three papers.

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The sale will likely be completed by April. The creditors, which include the other big Canadian banks, want to recoup the $950-million they are owed. If they don't make that amount in a sale, the banks plan to sell the assets later in an initial public offering.

The papers are one of two auctions under way. CanWest's broadcasting operations, which include Global TV, filed for protection from creditors in October and a chunk of that business is now up for sale. A group of U.S. and Canadian bondholders leading that restructuring are seeking a Canadian investor to inject up to $65-million of new money, in exchange for a 20-per-cent stake. There are two bidders lining up to make serious bids, including Canadian cable giant Shaw Communications Inc. and a group of unknown financial investors.

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