Trinity Mirror yesterday scrapped the planned sale of regional news titles in the Midlands and south-east of England after failing to secure high enough offers for the papers.
The sale of the Racing Post was completed as expected, however, after Dublin-based investment firm FL Partners agreed to pay £170m for the trophy sports title, about £30m less than Trinity had hoped to obtain for that business.
Trinity Mirror, which owns the Daily Record and Sunday Mail in Scotland, announced last December that it was putting dozens of its 240 regional and local titles south of the border up for sale. This followed a strategic review carried out against a background of declining profits, falling circulation and a weak advertising environment made worse by internet competition.
The company said then that it would concentrate on its national newspaper titles, digital operations and key regional titles in Scotland, northern England and Wales.
The titles placed on the market by Trinity Mirror included the South London Press, the Birmingham Post and the Coventry Telegraph, but it quickly became clear that the sales process would not be straightforward. When Trinity posted interims on August 2 it warned that the sale of its regional titles and the Racing Post would net around £150m less than the £600m originally anticipated.
In a statement yesterday, the group, headed by chief executive Sly Bailey, said it had pulled the remaining regional news titles which it had not managed to sell off the market altogether. Offers received "did not reflect the board's assessment of their true value, their earnings potential or the strong positions they hold in their particular markets," it said.
Newspaper groups understood to have run the rule over the assets include Gannett-owned Newsquest, publisher of The Herald titles, and Edinburgh-based Johnston Press, which owns The Scotsman.
Trinity's decision constitutes the second time in less than two years a major sale of regional newspaper assets has been called off. Daily Mail & General Trust decided to keep its Northcliffe regional newspaper division in February 2006 after deciding the three bids it had received not good enough. DMGT did, however, sell Aberdeen Journals, publisher of the Press & Journal, to Dundee's DC Thomson.
"The two decisions put a question mark over how much buyers are prepared to pay for what were previously seen as must-have' assets," said UBS in a research note. "The key change has been the (potential) impact of the internet on the regional newspapers' business models."
Trinity Mirror said the sales process would raise £263m, through the pre-announced disposal of seven businesses in London, together with that of the Racing Post. The board intends to return surplus cash to shareholders in consequence, with the handback likely to be about £200m.
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