Regional publisher Johnston Press has today confirmed it is in talks to buy national newspaper the i for £24m.
The company, which recently announced it was seeking to sell some of its 200-plus regional titles, is in “late stage discussions” over a deal to purchase the cut-price stablemate of the Independent and Independent on Sunday.
The newspaper, launched in 2010, retails for 40p on weekdays and sells around 275,000 copies a day.
JP says the deal would make it the UK’s fourth largest print publisher and would be “immediately earnings enhancing.”
According to the publisher, the deal would improve its ability to gain a greater share of the national advertising market as well as enabling it to benefit from the i’s circulation revenues.
It said the i, currently owned by Evgeny Lebedev, returned an operating profit of £5.2m in the year to September 2015.
However at a time when JP is seeking large-scale job cuts across its regional titles, the spending of £24m on a new acquisition is bound to raise questions.
According to its most recent trading update, JP’s net debt still stands at £184.6m, much of it dating back to a previous series of acquisitions in the early 2000s.
The proposed deal also leaves serious question marks against the future of The Independent and the Independent on Sunday, both of which are believed to be loss-making and dependent on the i to stay afloat.
The i has helped Mr Lebedev turn around the fortunes of the Independent stable which was losing £20m a year at the time he bought it in 2010.
News of the talks was confirmed in a statement issued to the Stock Exchange this morning, headed “Response to media speculation.”
It read: “The Board of Johnston Press plc (the “Company”) notes the recent media speculation and confirms that it is in late stage discussions with Independent Print Limited (“IPL”) for the potential acquisition of the business and certain assets of the i.
“There can be no certainty that the discussions between the Company and IPL will lead to any definitive agreement concerning the possible acquisition or as to the final terms of any such agreement. Completion of the acquisition would be subject to the approval of shareholders of the Company.
“The consideration for the proposed acquisition is likely to be £24 million, to be provided from the Group’s existing cash resources. In the year ended 30 September 2015, the i had unaudited carve-out operating profit of £5.2 million.
“The Board of the Company believes that, if consummated, the acquisition would provide the following key benefits:
· Greater reach: The combination would create the UK’s fourth largest print publisher with over 600,000 paid copies a day
· Increased scale: Greater reach would improve the ability to gain a greater share of the national advertising market
· Growing revenues: i has growing circulation revenues, and new opportunities arise from: a proposed digital product; new geographic markets; and from potential cross-selling of i’s advertiser base and vice-versa
· Accelerated digital transformation through: leveraging Johnston Press’ digital expertise to fully realise the i brand across digital platforms; the extensive Johnston Press network enables cross-promotion to grow audiences at minimal cost; it is expected that the regionally-oriented digital display network 1XL will be enhanced by the addition of a national brand.
“It is also expected that the acquisition would be cash generative and immediately earnings enhancing. A further announcement will be made when appropriate.”
Steve Auckland, chief executive of Mr Lebedev’s ESI Media added: “I can confirm that we are in discussion with Johnston Press regarding the sale of i newspaper.
“At this stage no decision has been made and we realise the uncertainty that this news will cause our employees and customers. Johnston Press are bound by strict PLC guidelines so unfortunately we can make no further comment at this time.
“ESI Media remains committed to our brands, building on our fast growing global footprint, whilst cementing our place as the most important destination for audiences in the capital.”
Meanwhile Johnston Press has declined to comment on claims by former Scotsman editor John McGurk that the flagship title is being marketed for sale with a £10m price-tag.
Writing on a Scottish business website, John claimed the group had been “touting around” the Edinburgh-based title but there had so far been “no takers.”
A spokesperson for the group said it would not comment directly on the claims or any other issue relating to its portfolio plans.
Johnston Press bought The Scotsman from the Barclay brothers for £160m in 2005.
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If the i is so commercially promising – “i has growing circulation revenues, and new opportunities arise from: a proposed digital product” – why is it being sold? And can someone please translate Mr Auckland’s spiel. “ESI Media remains committed to our brands, building on our fast growing global footprint, whilst cementing our place as the most important destination for audiences in the capital.”
The i is an ESI brand so how can “we remain committed to it”? if they’re flogging it off? Beats me.
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Oh no. My favourite newspaper could end up in the hands of the biggest knackers in the world of publishing.
Many years ago when I was working for Portsmouth and Sunderland Newspapers and JP were planning to buy us, I was told by a senior executive of a rival group that JP would ruin the papers in the PSN group. He was right. They did.
I challenge any JP exec to name ANY newspaper that has improved under their control.
Tumbleweed.
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Is this exciting? I can’t decide.
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Oh, I forgot . . .
Massively in debt. Entire company only worth about £40m. Declining sales. Struggling ad revenues. Share price on the slide for months. More job cuts right across the group. Web sites that look like they’ve been designed by sixth form students.
Let’s buy a national newspaper . . . .
So, which bit of Ashley’s cunning plan am I not getting?
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Genuinely gob-smacked. This is so far out of left field, I had to check to make sure it wasn’t April 1. Staff at the i should be heading for the exit as soon as this deal goes through.
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So this ‘earnings enhancing’ move will end the non-stop conveyor belt of JP redundancies? Thought not!
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How are they going to fill the i without the tie up to the Indy and IoS?
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Oh…….
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“Leveraging Johnston Press’ digital expertise”. Funniest thing I’ve heard all day.
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If I couldn’t afford to feed my child, I wouldn’t go out and buy a new car.
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Lunatics, asylum. No more to say.
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Jesus Christ…
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The i recycles material from the Independent – how is JP going to fill it? The i is based with the Indy/Evening Standard in London – will JP have to acquire a new office? Biggest question of all – how can a company still drowning in debt, with a calamitous share price and continuously shedding its staff and assets contemplate such an acquisition?
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Has somebody got hold of the wrong end of the stick? Surely it is IPL taking over Johnston Press?
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“Hello dear, you’ve been a long time, did you get my paracetamol, rope and a revolver?”
“No, better than that – I’ve bought a newspaper!”
(apologies to The Fast Show)
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RIP i
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Butchering all the horses in its own stable to find the cash to buy one seemingly better horse from someone else’s yard? Well, that’s going to make plenty of sense to no one.
Unless, of course, JP believe they can emulate the Trinity Mirror model? Because that really works.
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How about JP investing in products it already owns – rather than letting them wither on the vine – before splashing cash on a vanity project like this?
Outrageous, obscene, immoral, and an insult to swathes of JP journalists made redundant over years of appalling mismanagement under Ashley Highfield.
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Nothing to worry about. The i is quite successful. Ashley and the boys will soon sort that out!
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WTF???
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Steve Auckland’s got a history of selling good newspapers to Johnston Press so that they can ruin them . . .. anybody remember RIM? Bye-bye i
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If ever there was a kiss of death, this is it. By-bye i.
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As pointed out, the i is The Independent’s copy just rehashed and reheated.
And the i’s stronger sales is what’s keeping The Independent afloat. The two are so strongly linked together.
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Steve Auckland? Steve Auckland? Now, where have I heard that name before…?
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It is necessary for JP to buy more newspapers, as they are running short of people to make redundant.
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Can just imagine all the JP staff throwing parties at this news.
Its last big buy, The Scotsman, knackered them financially and lowered the quality.
The world of JP gets ever confusing. I am so glad I do not earn my living there.
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The end is n-i…
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Presumably being funded on the back of the latest cuts to staff / freelance budgets on existing JP titles
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I bet the staff at the I can’t wait for the JP blueprint to be rolled out on them ,news rooms of the future,redesigned titles,improved web sites.no staff photographers,reader generagted stories,and the rest of the JP cancer that as killed of their regional titles now spreading into a new prey.I’ll have a fiver on Jeremy Clifford becomes Editor .
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We’ve no money and we’re laying off all the staff – yet suddenly there’s £24m to buy i. How’s that work then Ash?
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Mad,Hatter and Tea Party are the words to describe this lot.
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Having worked for TM I can tell you having regional newspapers sistered to a large-scale daily is never a by-word for success.
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You couldn’t make it up.
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‘When’ the i starts to make a loss due to JP’s incompetence, the company could fold.
All that needs to happen is another similar paper comes on the market, with better content etc and the i could end up selling as few as the Indy. I’m guessing that the Indy may close if this sale goes through as the papers are so similar in content, produced by the same staff. In JP’s hands, they will strip the i’s staff to the bear bones and get the a hub up north to put the copy onto templates.
There is very little content the weekly and dailies can contribute to the i, when was the last time you saw a photo or copy from a local paper. It’s full of PA, Reuters and staff copy etc
The Scotsman was the national paper of Scotland. Now selling around 20k.
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It would appear to me that Johnston Press is buying the i-paper brand because it is the most profitable part of the Indy stable. But by not snapping up the loss-making Independent and Independent on Sunday with it, the ties between those papers will most likely be quickly severed.
The new i will probably include the best of the news taken from the regionals and the gaps will be filled with PA copy. The loss-making Independent and Independent on Sunday will no doubt be closed with lots of staff laid off and a few moved to the Evening Standard.
This is a sad day for journalism. The i will be poorer and we’ll lose two brilliant newspapers packed with talented journalists.
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Well that’s the kiss of death for my favourite national. This is the same company that is currently making old friends and colleagues of mine redundant and has driven the old-established paper I worked for into the ground, to pay for the fall-out of earlier ill-advised acquisitions. I despair.
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It’s a bit like Michael Jackson taking over a plastic surgery business.
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Someone will be opening a can o’ Smithers tonight….
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In the words of Meldrew, i don’t believe it…
Wise men say,
Only foolds rush in,
But ‘i’ can’t help,
Falling in death with you!
etc
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JP’s new slogan: Life is national.
(or is it enriching its portfolio?) yup, I made up that bit of JP-speak.
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I am struggling to afford parts for my broken down bike. So I just went out and bought a £30,000 motor.
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It’s like finding out Lehman Brothers are coming to take over your credit union.
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Might be worth remembering this when the strike ballots are sent out.
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Get rid of most i journalists and fill the paper with dross from the rest of the JP empire, I’d say that’s a likely scenario from this exciting news.
The i might be a cash cow now but, like all other newspapers, it’s probably heading for a digital-only future. Hope Ashers has done the sums to make sure he’s not buying something nobody will want to pay for online.
Any chance of a management buyout at the Scotsman? I would certainly buy shares in that.
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It’s like putting wee Jimmy Krankie in charge of the Chicago Bulls
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It’s like putting Robbie Savage in charge of Intel
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“JP to buy national newspaper?” They’d struggle to buy a copy of yesterday’s Daily Mail without having to cadge a few pence.
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If JP gets hold of i, stand by for mass redundancies!
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I can just see Ashley pushing ‘The Cart’ around the newspaper industry shouting: ‘bring out your dead…bring out your dead’
The I…’I’m not dead yet’
Ashley: you are now!!
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It’s like letting a student driver race an expensive car in the F1 Championship!!
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Oh dear, that’s gone down well.
Does Ashley read this, I wonder?
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Good Lord, in little over a decade a 160 million pound purchase of one paper has turned into ten million.
Ashley and co would do better on the antiques gameshow, Bargain Hunt!
Oh what fund they could have buying and selling newspapers.
But I doubt they would be winning contestants!
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Words almost fail me. Who was it said: “You can’t be serious?”
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As seen on twitter:
It’s like letting Harold Shipman open an old folks’ home.
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The news rooms of JP must be aghast at this latest bomb dropped on those who are still clinging on, despite Ashley’s vehement campaign to destroy good, quality local journalism. How on earth they have managed to scrape together £24million when they’re cutting jobs and resources left, right and centre is beyond me. How can a company that won’t order its reporters new notebooks even consider getting into the national newspaper game? It’s sickening, and totally delusional. Mr Highfield is nothing more than a big show off.
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Please implement UGC ! Give the people what they want! I need more badly taken photographs and articles of pure drivvle! In all seriousness one thing that hasn’t been tried and might indeed be the master stroke would be UGC Page3! Can you imagine Ashley- it ticks all the boxes! Throw in some buzz words and I’m sure you can sell it. The messiah of local news can play with the big boys! Nurse!!!!!!!!!
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Dust to dust… Ash to Ash…
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One good thing about working for JP was everyone’s in it together in the face of adversity, something that I don’t feel among the staff at the other big newspaper company I now work for. Being a JP employee was bad for morale but great for stress busting boozy nights out!
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Lost for words, guys.. You’ve said everything that could be said,. My i subscription runs out at the end of the month. Do I take a gamble and renew, knowing that the dead hand of Johnston Press could soon be placing its shroud over the best product to emerge in UK journalism for many years?
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Did somebody really suggest Jeremy Clifford will become Editor, when there’s clearly a capable Editor already in situ, with a track record of success.
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Dick Head Minim.
Usual useless. Advice.
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RiP
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The reason i works is because it’s repurposed copy from the Indy. Well written, well subbed and well laid out. Without that you haven’t got a paper.
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Ld: thanks for your gracious words. In my post I quoted ESI and Steve Auckland, and asked two questions. I’ve tried but fail to spot any “advice”, so conclude you’re not an editor, sub or proofreader. Disappointment’s skewing your judgement, Ld.
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It is scandalous that those JP staff, informed in early January that their jobs were at risk, still haven’t been told their fate and impact of latest tranche of cuts. Yet the company has spare cash to pay for a national newspaper…I despair.
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People from outside of the local media industry reading this must think it is staffed by the biggest bunch of moaning out-of-touch self-opinionated whingers ever.
They may be right.
The whingers may also be right.
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Paid about £160 million for Scotsman. Current debt about £180 million.
Lesson obviously not learned..
Go buy another!
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The words Digital Media Initiative are not said enough in connection with Ashley Highfield’s name for my liking
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Voice of Reason UK.
I remember about five or six years ago commentators on this website being slagged off for being a lot of negative moaning Minnies for predicting huge job losses, sales dives, and fall in quality on JP papers.
say no more…
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I wish Ashley’s management speak emails would explain to the staff who were told only a month ago about 100 more editorial redundancies (or as he might say, ‘structural reorganisation collateral damage’) how the group can afford to add £24 million to the debt that was the excuse for all the job losses.
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JP Saves the i
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Any villages lost an idiot?
He – or she – has obviously been hired as a policy advisor at JP.
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Btweenthelines. Indeed it was so.
I recall about 15 years ago regularly doing battle with JP bigwigs who wanted me to put more resources into our website. I pointed out that web sites were going to destroy the printed products. I asked how web sites would make money. Got no sensible answers.
Oh well . . .
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Hilarious … the first national newspaper produced by NO journalists. It’s the newsroom of the future!
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