The Globe and Mail reports in its Wednesday edition that merger talks between Canada's two largest newspaper publishers were scuttled because the major lender to one of the companies wanted to hold onto a significant amount of debt rather than convert it to equity in a possible new entity. The Globe's Joe Castaldo and Andrew Willis write that Postmedia and Nordstar Capital, which owns the Toronto Star, said Monday they had ended discussions to merge and would not pursue a deal because they were unable to agree on the terms. A major sticking point was how much debt would be held by Postmedia's biggest lender, New Jersey hedge fund Chatham Asset. The companies first announced they were in talks in late June. Key to making a deal work would be an agreement that would see Postmedia's lenders swap a portion of their holdings for equity in the new company, easing a major burden on the publisher, which owns 130 titles, including the National Post. The company has $288-million in debt and has incurred $198-million in interest expenses since 2017, hamstringing its ability to invest in operations. Chatham is owed $263-million of that amount and wanted to retain a larger portion of the debt than Nordstar was comfortable with.