LONDON (Reuters) - Tabloid veteran David Montgomery is leading talks to consolidate Britain's local newspaper sector using the Daily Mail's regional unit at the heart of a group partly owned by Trinity Mirror.
Daily Mirror owner Trinity Mirror said on Monday it could take a minority stake in a new group formed by combining the assets of privately owned Yattendon's Iliffe News & Media with Northcliffe's 84 newspapers. Northcliffe is owned by Daily Mail.
The local newspaper market, in need of cost cuts to offset the loss of advertising revenues to the Internet as well as falling circulations, is ripe for further consolidation, analysts have said.
Daily Mail's shares were 0.5 percent higher at 475.25 pence by 1309 GMT, while Trinity Mirror's shares were up 10.2 percent at 56.5 pence.
DMGT, the publisher of the Daily Mail, confirmed on Sunday that it was in talks about Northcliffe's future in response to reports about a sale of the unit.
Former Trinity Mirror chief executive Montgomery was leading talks on the deal, which would value Northcliffe at about 100 million pounds, according to sources.
Montgomery has played a key role in restructuring Europe's newspaper industry, firstly at Britain's Mirror Group and then as chief executive of European newspaper group Mecom.
He told Reuters a year ago that he had formed a London registered company with unnamed partners called Local World, with the intention of investing in European titles.
Local World is the name of the proposed new venture for the British titles, reports have said.
Hedge fund manager Odey Asset Management is also considering backing the venture, according to sources close to the talks.
Trinity Mirror was not planning to put its local newspaper assets, which include the Liverpool Echo and Manchester Evening News, into the venture when it is created, the sources said.
Analysts at Liberum Capital said DMGT selling Northcliffe would be seen as a positive, given the disproportionate negative impact the unit has had on sentiment.
"While DMGT could have sold the regional newspaper business for 1.2 billion pounds several years back, this is a 'sunk cost'," they said.
"The important thing is they exit it now. While not a game changer, it should have a positive impact on perceptions."
(Reporting by Paul Sandle; Editing by Mike Nesbit)
Source: http://news.yahoo.com/ex-mirror-chief-leads-daily-mails-regional-shake-132007266--finance.html
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