The scramble to buy the prize assets of regional publishers Johnston Press appears to be under way after “numerous parties” showed interest in buying parts of the company.
Sky News has reported that Daily Mail owner DMGT is drawing up plans to take on cut-pice national daily the i, but it is understood the company has “no intention” of bidding for any of its regional titles.
However, Sky says “numerous parties” have expressed interest in buying other parts of the business, with Trinity Mirror, now known as Reach plc, named as one of the interested parties.
Shares in JP soared by more than 20pc this morning in the wake of the Sky News story which was also covered by business website City AM.
However, with no suggestion that any party is set to bid for the whole business, it now seems increasingly likely that the 251-year-old company will be broken up.
In its report on DMGT’s potential bid for the i, Sky News said: “Trinity Mirror (sic) could seek to buy some of Johnston Press’s regional titles, which include The Yorkshire Post, and sources suggested this weekend that ‘numerous parties’ had expressed an interest in tabling offers for parts of the business.”
It added: “[Apart from the i], sources close to DMGT ruled out its interest in any other substantial parts of Johnston Press, and said it had no intention of returning to the regional newspaper market.”
JP announced it was putting itself up for sale last month after failing to come up with a refinancing package to pay off its £220m debt.
The company’s board has made clear that its ideal outcome from the current sale process would to find a buyer for the whole company, which employs 2,141 staff across the UK and publishes more than 200 regional and local newspaper brands.
But chief executive David King has since said there is a “very strong likelihood” that bidders will move to break up the business by trying to buy particular assets.
In reaction to the latest speculation, a JP spokesman said merely: “The formal sale process launched on 11 October is ongoing.”
In its original sale announcement last month, the company said: “In order to assess all strategic options to maximise value to its stakeholders, the board of Johnston Press announces today that it has decided to seek offers for the company.
“There can be no certainty that any offer will be made for Johnston Press, nor that any transaction will be executed, nor as to terms of any such offer or transaction.”
Following the launch of the process, the company’s biggest shareholder Christen Ager-Hanssen, announced that his Custos Group had increased its shareholding from 20.1pc to more than 25pc, saying this will allow him to be “more active”.
His increased stake means that were any offers to come in for JP he could effectively block a sale of 100pc of the business – although he would not necessarily be able to prevent the sale of individual assets.
HTFP has approached both DMGT and Reach plc for a comment.
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This was always going to be the case,rather like a broken mirror,someone might be able to make something of the better fragments but no one in their right mind would buy the entire shattered remains.
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I think there’s little doubt, is there, that JP as a single entity is doomed, which has been the case for some time. However, the news that Reach is in the market for some of the regional titles sends shivers down my spine. While the prospect of a company hastening to the rescue of another might have provoked cheers years ago, this announcement has the air of vultures circling a newly-dead carcass and looking forward to a good meal of asset-stripping – yet again.
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shares soared by about 20 per cent….that would be from nearly nothing to a bit more than nearly nothing then. sell, sell, make a fortune (not).
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If Reach wins its bid then it would need to go to the monopolies commission. So far so obvious.
Let’s put aside any arguments about falling standards etc (too many commentators on here do not apprecaite that the world has moved on since the 1980s).
More to the point it can have a big and chilling affect on staff but not necessarily in the way you might think. Reach has a policy of not re-employing anyone it has made redundant within a year.
If it owns yet more titles where do former staff who wish to remain in the industry go? The options are increasingly limited as it is.
The company currently owns seven national newspapers (not counting the Scottish and Irish editions) and hundreds of local titles and dozens of websites across the country.
Lose your job and you will it virtually impossible to work, at what is already one of the biggest industry players, for the next 12 months.
It would be too strong to call it a blacklist but the result will be the same.
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Percy – frightening thought. But Reach will probably be a bit more canny than JP over the way it goes about things. They’ll buy up titles to temporarily boost their profits by making cuts to keep their shareholders happy, then flog off anything that becomes a liability. It may go against any normal common sense to buy something to make money by slashing the hell out of it, but Reach seem to have got away with it so far and quite successfully.
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Percy
Anyone being made redundant should see this as a blessing as hopefully they will come away with a financial settlement and a chance to find work at one of the many new independent publishers springing up all over. These operations are generally well run,popular with their communities and offer a working atmosphere not unlike the regionals did 10-15 years ago,and let’s face it, why on earth witkd anyone,given a road out, want to return to work st one of the dying bigger publishing groups?
All good wishes to those soon to be ex employees.
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Dozens of towns could lose their daily/ weekly newspapers once this unfolds and leaves hundreds out of work. Buying JP whole is not an option once potential buyers do their due diligence and learn the scale of continuing decline and asset stripping which includes premises being sold off. Yes, the I, with circulation running at approx -10% is, at the right price, a good buy for a few years, but you can’t say that about regionals. Why buy them and their problems? Better to employ a few staff and start from scratch online only – and that may be the way forward for redundant staff wanting to work all hours in an industry with little financial reward.
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I lost my JP local years ago when it moved out the town and decided to move up stick 20 miles away. How they can do this and then run campaigns about keeping ‘jobs’ in the town with a straight face I’ll never know.
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I reckon the only thing worse than working for Johnson Press would be working for Johnson Press and then getting taken over by Trinity Mirror.
I do some PR in my job these days and it’s grim seeing things from this side. After taking the trouble to build relationships with local journos they tend to disappear after a few months (one entire paper vanished) and their patch gets given to a chief reporter at another paper who now has to do that job too.
The kind of things that would have been our bread and butter – good Remembrance Day/Fireworks Nights picture spreads for example, are now non existent, replaced by a couple of snatched phone pics.
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Jeff Jones. good points. Like some papers having reporters dealing with areas about 40 miles away. All this from a company cynical enough to boast “life is local”.
Frankly , though it is sad to say, the loss of the worst JP weeklies would be little loss. to the community, readers or advertisers.
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Yes, it’s a fast moving world and putting aside any arguments about falling standards is a bit old school now. Readers, of print and online, whether regional daily or small independent, do actually notice poorly written incomplete storie. Meanwhile Reach might still relax their time constraints when it suits them.
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I’m quite interested to see just how serious Illiffe are about coming back in to the market seeing as they were once quite proud of both the MK news and BOS you’d think the MK and Bedford Citzen plus some others round there may interest them. I can’t imagine Reach having much interest in these areas seeing as they shut all the old titles down there and went online only.
I also find myself wondering if Media Force will step up to publishing as they did in Ireland seeing as a large part of there business is running distribution for JP and also booking leaflets and advitising for them.
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Great pun, Fellwalker.
Otherwise, the huge issue remains that JP haven’t got a hope of receiving bids to anywhere near the value of the debt. I predict only a small number of title sales and a continuation of the can kicking for a little while longer unlit the road runs out.
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@formerloyalfollower
I would have thought the Peterborough Telegraph would be a better fit for Iliffe’s current business model given they have all the ex-JP titles in South Lincs, Cambridgeshire and West Norfolk.
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So now JP in administration and the pension scheme is not to be transferred. Those of us awaiting our pension date shortly have no idea now what will happen. “If the scheme enters the PPF, the PPF will provide members with pension benefits from retirement based on the PPF compensation rules. Any defined contribution pension schemes in which the Group participates, which cover the majority of the Group’s current employees, should not be affected.” Eh?
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