Johnston Press is planning to buy Regional Independent Media for £560m.
Johnston, the UK’s fourth-largest regional newspaper group, is launching a £220m rights issue of shares in connection with the deal.
The deal is agreed and has already been approved by the RIM board. It goes to the Johnston board on April 11.
RIM – the fifth largest regional press group – publishes the Yorkshire Post, Yorkshire Evening Post, Sheffield Star, Lancashire Evening Post and Blackpool Gazette, as well as a portfolio of more than 100 other newspapers and magazines.
Johnston’s top titles include the Sunderland Echo, South Shields Gazette, Northampton Chronicle & Echo, Northants Evening Telegraph, Peterborough Evening Telegraph, Hartlepool Mail and the Halifax Evening Courier.
Johnston believes the deal would strengthen its portfolio, create annual cost savings of around £9m, improve RIM’s operating margins and place Johnston in a strong position for future consolidation.
Johnston chairman Roger Parry said: “This is a transforming acquisition for Johnston Press at a fair price.
“RIM is an excellent fit with Johnston Press and significantly strengthens our position in the consolidating UK regional newspaper market.”
Chris Oakley, RIM’s chief executive, said: “Our managers and staff have made RIM titles leaders in editorial quality, in innovation and in profit generation.
“I know Johnston Press is fully aware of the strengths of the titles it is acquiring, the principal strength being the quality and commitment of its staff.”
Johnston Press was founded in 1767 and from its roots as publisher of the Falkirk Herald, the Group now has a portfolio of nearly 200 titles stretching from Scotland to the South Coast of England.
In 1988 Johnston Press became a fully listed public company on the London Stock Exchange and is currently the fourth largest publisher of local and regional newspapers in the UK.
RIM was formed in February 1998 after the acquisition of regional newspaper titles from United News & Media by a consortium of investors led by Candover, the private equity specialist.
RIM publishes more than 50 daily, paid weekly and free newspaper titles in Yorkshire, North West England and Scotland. It also has Internet and radio interests and operates a leaflet distribution company.
The sale would not include three RIM subsidiaries – the on-line customer relations management company atmyside, the co-operative direct mail business Direct Media Solutions and the business magazines and on-line database of Newsco-Insider.
Read more on the company results – and the proposed takeover – tomorrow.
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