Trinity Mirror has confirmed it is in talks to buy rival publisher Local World in a deal that will make it the dominant player in the UK regional press.
In a statement issued this morning, Trinity Mirror confirmed it is attempting to buy out the 80pc of shares in Local World that it does not already own.
It read: “The Board of Trinity Mirror plc notes the recent media speculation and confirms that it is in discussions with Local World Holdings Limited for the potential acquisition of the shares not already owned by Trinity Mirror plc. There is no certainty that any agreement will be reached.
“A further announcement will be made if and when appropriate.”
A merger between Trinity and Local World would create by far the biggest regional newspaper company in the UK with a publishing footprint covering 15 of the top 25 centres of population in England and Wales.
Trinity Mirror already owns the main daily newspaper titles in Birmingham, Manchester, Liverpool, Cardiff, Coventry and Newcastle. Control of Local World would enable it to add Bristol, Nottingham, Leicester, Hull, Plymouth, Stoke, Derby and Swansea to that list.
Trinity Mirror took a 20pc shareholding in Local World when the company was created in 2013 from a merger of Northcliffe Media and Iliffe News and Media.
DMGT, which previously owned Northcliffe, remains the biggest shareholder with a 38.7pc stake, while Iliffe parent company Yattendon plc owns 21.3pc. The other shareholdings are split between a variety of investors.
At the time Local World was created, the company was valued at around £70m, with Trinity Mirror paying £14.2m for its 20pc stake.
Reports at the weekend suggested the Trinity deal could be worth £200m, which would give both DMGT and Iliffe a sizeable return on their original investment.
Speculation about a tie-up between the two companies has been rife since May when reports of a takeover deal first emerged.
At the time, both companies declined to comment on the rumours, and it was later reported that the talks had foundered amid opposition from Yattendon boss Lord Iliffe.
With little overlap between the two companies’ existing publishing footprints, it is believed that any regulatory obstacles to a merger could be overcome.
One of the few areas where the two were in direct competition was Nuneaton – but Trinity has just announced it is to close its weekly Nuneaton Tribune which competed with Local World’s Nuneaton News.
Trinity Mirror has already recouped its £14.2m investment in Local World with its 20pc share generating dividends in excess of £15m over the past two years.
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Newspaper monopolies no good. Hyperlocals fine, but they all sell out in the end when economy of scale kicks in. Some way MUST be found to preserve regional independence in the media. Perhaps some form of charter status for the biggest weeklies and dailies like the BBC enjoys. It’s not perfect, but you can kiss local democracy goodbye if you don’t find a way forward instead of just moaning. Journalists must be empowered and be free to speak their minds and not just trot out what shareholders want to hear.
Reporting must be a profession again, . not just a hack industry such as the profit only motive has made it.
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Oh well, that was a good idea while it lasted. I wouldn’t blame the shareholders for cashing in their chips but given TM’s debt pile I’d fear for many Local World staff in any takeover. We’ll have to see.
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It’ll produce online generic news nation-wide
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I think TM are effectively debt free now
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When you work for a company that’s in talks with trinity mirror, it must be like being one of those rebel soldiers on the spaceship at the start of Star Wars when they hear the Imperial troops about to break in and kill everyone.
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Trinity Mirror has entered the base, Trinity Mirror has…
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Jeff Jones: The Texas Chainsaw Massacre also springs to mind.
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how long before “rationalisation”?
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To my former colleagues at Local World: Sorry, folks.
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Some years since the name Northcliffe Media hung over the doors of what were their products, you still get a small sense that quality is still at the heart of these titles under Local World’s ownership. If this deal is only weeks in the making, they will be poor relations of their recent past by Christmas under the ownership of this ragged bunch of rangers. One more nail in the coffin of iconic local media brands.
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All I can say is: “Oh, dear!”
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OK chaps let’s make it lean and mean and kick it into touch
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‘The numbers don’t lie’s’ post is ominous and TM’s rotten reputation goes before them. Quality is indeed still at the heart of LW’s offering but I fear other considerations unconnected to good journalism will take precedence if the deal goes through. And there’s the rub… ‘if’. Until we know something for sure it’s all speculation, though I’d like to hear from serving TM staff here before this thread fizzles out.
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So here we go again! There are only so many mergers someone can take before all the offices are closed. Now where’s my company tent.
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Three years ago, I was present at one of General Montgomery’s pep talks on how Local World was a brave new world in regional journalism. When he started talking about venture capitalists, my immediate reaction was: “This ain’t for me.”
I was one of the first in line to collect my redundancy cheque and haven’t looked back. Seems this latest shenanigans has further vindicated my decision. Glad I’m out of it.
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Nice one, Trinity Mirror.
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Oh flip. Pass me my light-sabre, Luke
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I find this astonishing.
From the word go, Local World executives have made a huge song and dance about how different their company will be from the “big” newspaper publishing groups.
How they’ll go deeper into the local fabric, providing news and blogs day by day and expecting only reasonable returns instead of the sky-high margins demanded by others.
We were told to expect a very devolved approach to fully developing a small patch.
Their mantra was “local content, local sales, local management”.
Three years later and they’re happy to cut and run and sell up to Trinity.
I hope government ministers remember all this when they’re sitting across the table from regional newspaper chief executives, pleading poverty and grovelling for tax breaks, monopoly law changes and all the rest.
They’re basically a bunch of snake-oil salesmen.
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Which brings me back to my earlier comment about venture capitalists. This breed are only in it for a quick buck. I told my editor at my “exit interview” that I doubted his paper would have the same owner in five years. He said he hoped I was wrong. I probably am because it looks like three not five years.
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bluestringer – you’re making the assumption that the Montgomery and his team want to sell. My understanding is that isn’t the case, but that DMGT do.
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