A mystery bidder offered up to £150 million for the whole of Johnston Press before it went into administration, a report has revealed.
The company’s administrator Alix Partners has revealed a total of six offers was received by the regional publisher after it was put up for sale last month – including two for selected JP regional titles only.
While the bidders are not named in the report to creditors released this morning, Alix revealed an offer of £2.5m was made for Sheffield daily The Star, the Sheffield Telegraph and the Doncaster Free Press, while a bid of £30,000 was also received for the Observer Series and West Sussex Gazette.
One offer of between £140m and £150m was made for the whole of the group, while a separate bid of between £96m and £120m for the group, excluding national daily the i, was also received.
Two separate bids for the i alone, worth £25m and £35m respectively, were also made, one of which is believed to have been from Daily Mail owner DMGT.
However, it was considered that none of the offers received, or any combination of them, would result in aggregate net proceeds sufficient to enable the group to repay its bonds in full.
Instead a “pre-pack” deal was reached last weekend, which involved JP being bought out by a new company, JPIMedia, after a brief period in administration.
In its report, Alix defended the move on the grounds that it had saved the jobs of JP staff, but admitted that while funds would be available for distribution to secured bondholders, there will be “a significant shortfall to creditors”.
A spokesman for Alix said: “We are confident that, in the circumstances, the sale achieved the best available outcome for creditors. We are also satisfied that the marketing process for the sale of the business and assets was appropriate and well publicised.”
“The sale consideration, which resulted from the best offer received, was consistent with independent valuations carried out by Mazars and far in excess of other offers received. Proceeding with a swift ‘pre-pack’ had the additional advantages of mitigating disruption to the business and importantly preserving jobs across the organisation.”
Earlier this week, the government-run Pensions Protection Fund confirmed it will lodge a claim of £305m with the JP’s administrators, a figure which it calculates to be the cost of continuing to secure the benefits of JP’s pension scheme members at their current level.
The deal has been described as “shameful” by Christen Ager-Hanssen, whose 25.06pc shareholding in the old JP was rendered worthless by the decision to take the company into administration on Friday night.
Mr Ager-Hanssen has now set up a Pensioner & Shareholder Action Group called ‘Johnston Press – the Truth’, which he says is “dedicated to proving the truth about the circumstances surrounding the Johnston Press Plc pre-pack and to holding those responsible accountable for their actions”.
JPIMedia has declined to comment.
The Alix Partners report put the overall valuation of the company at £181m, including publishing assets, property, trade debts and goodwill.
A table listing its assessment of the intellectual property valuation of the company’s regional subsidiaries titles can be found below:
| Company | No of titles | IP value (£000) |
| Ackrill Newspapers | 1 | 277 |
| Angus County Press | 5 | 25 |
| Blackpool Gazette and Herald | 3 | 470 |
| Century Newspapers | 1 | 2,382 |
| East Lancashire Newspapers | 4 | 173 |
| East Midlands Newspapers | 6 | 927 |
| Galloway Gazette | 2 | 4 |
| Halifax Courier | 3 | 208 |
| Johnston (Falkirk) | 7 | 295 |
| Lancashire Evening Post | 4 | 1,405 |
| Lancashire Publications | 1 | 36 |
| Lancaster & Morecambe Newspapers | 2 | 170 |
| Love News Media | 1 | 5 |
| Morton Newspapers | 10 | 243 |
| Northamptonshire Newspapers | 6 | 1,605 |
| Northeast Press | 9 | 1,727 |
| Portsmouth Publishing and Printing | 7 | 2,471 |
| Premier Newspapers | 10 | 672 |
| Publishing | 4 | 15 |
| Sheffield Newspapers | 2 | 1,957 |
| South Yorkshire Newspapers | 4 | 299 |
| Stornoway Gazette | 1 | 23 |
| Strachan and Livingston | 4 | 53 |
| Sussex Newspapers | 5 | 320 |
| T.R. Beckett | 2 | 469 |
| The Derry Journal | 2 | 177 |
| The Scotsman Publications | 3 | 4,341 |
| The Tweeddale Press | 4 | 102 |
| Wilfred Edmunds | 6 | 1,320 |
| Yorkshire Post Newspapers | 3 | 5,515 |
| Yorkshire Regional Newspapers | 4 | 263 |
| Yorkshire Weekly Newspaper Group | 4 | 470 |
| Total | 130 | 28,419 |
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Makes me wonder what the IP value of tha Halifax Courier was before I got out five years ago, with my tiny bundle of free shares for services rendered which are now worth nowt……
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Should have waited to flog ‘em all on Black Friday…..
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While scouring the internet for info about what might happen to my savaged pension I find I can’t read most of the pages because a) they are behind a paywall or b) they are on Johnston Press sites where the page flashes violently and jerks up and down, rendering it unreadable. If that’s not ironic…
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The new JPI set-up will have a big struggle with credibility as a ‘trusted brand’.
For instance, what happens if there is a pension crisis at a company within the circulation area of any of their local titles and people are left out of pocket as a result of major cash shortfall?
Can the newspaper honestly write a leader column or a comment piece deploring the turn of events when they themselves have had unpaid creditors in a ‘former life’.
It is not quite as easy as some people think to ‘write the slate clean.’
Trust takes years to build up and only a matter of minutes to break.
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Given the dubious morality and lack of ethics so far displayed by jpiMedia in dumping the pension fund on the PPF I wouldn’t trust them further than I could throw them. And we thought JP were bunch of no-good cowboys…
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I think a bigger question here is how the employees rights change in this type of takeover. If the bid in this article was accepted then under TUPE their T&C’s,would have stayed the same. I’m sure when taking over from insolvency this is not the case. The one thing I’m not sure of is whether in the case of making people redundant they would now be liable for years served in terms of redundancy payments or if they are even accountable for it.
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@Formerloyalfollower.
The business was not bought out of insolvency, it was bought out of administration. JP employees have been TUPEd over to the new company and retain the years of continuous employment they have accrued. It was in a list of FAQs sent to all the staff last week. Anyone made redundant in the future will get the same payments for time served as if they were made redundant by JP.
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How will the “new” JPI Media progress and develop? If it uses the same old idea that digital is the future, it will collapse in a heap, again. The digital drivers in this industry have had a good 15 years to prove their point and have failed. There are millions of advertisers out there who need print advertising. The old JP all but abolished advertisement, newspaper sales operations and editorial departmemts and then glibly used it as an excuse for poor ad and newspaper sales! JP surely has learnt the lesson. JPI, for everyone’s sake, don’t make the same mistake again.
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