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