Gannet, Trinity and Johnston Press bid for Newscom group

A Dutch auction looks likely following the identification of three bidders for the Southampton-based regional newspaper publishing group Newscom.

A Dutch auction looks likely following the identification of three

bidders for the Southampton-based regional newspaper publishing group

Newscom.



The three bids - from Gannett/Newsquest, Trinity Mirror and Johnston

Press - have all been referred to the Competition Commission. An

adjudication is expected by mid-March.



There is still time for other bidders to show interest, although DMGT

has ruled itself out and Southern Newspapers is thought to be too

small.



Gannett, publisher of USA Today and owner of Newsquest in the UK, has

already had one undisclosed and unsolicited cash offer rejected by

Newscom, insisting that the price was unrealistic. The company is

currently valued on the stock market at around pounds 340 million,

however, the winner is expected to pay a high premium.



Newscom publishes 184 regional titles in the South and South West

including the Southern Daily Echo in Southampton, the Bournemouth Daily

Echo, the Dorset Evening Echo and the South Wales Argus. It also owns a

small financial magazine publisher, Southern Magazines, based in

London.



Analysts believe Johnston Press needs to do this deal and would realise

significant cost savings by merging its Portsmouth and Sunderland

operations - acquired last June in a bid battle with Newscom - into the

latter’s Southern operation.



However, chief executive Tim Bowdler wouldn’t be drawn. ’It’s too early

in the process to focus on specific synergies and benefits. But we are

neighbours on the South coast and we’ve got to be interested.’



Rules require that bids involving a single title with a weekly

circulation of 50,000 - or 500,000 for a combined portfolio - have to be

considered by the Competition Commission.



Its findings, expected by 13 March, will then be passed to Stephen

Byers, Secretary of State for trade and industry, for a decision.



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