INM ties up deal to sell off its UK titles
INDEPENDENT News and Media (INM) has sold its British titles to Russian billionaire Alexander Lebedev as the company focuses on its stronger markets.
Shares in INM closed up at 12 cent yesterday as the markets welcomed the deal. Analysts said the agreement was very favourable for INM, allowing it to focus on its profitable markets.
"It's a very good deal," said Killian Murphy of Goodbody Stockbrokers. "The group looks an awful lot stronger without them (the UK titles).
"Its operations are now focused on the island of Ireland, South Africa and Australasia."
INM will continue to print certain Trinity Mirror publications in INM's Northern Ireland production facilities, with the existing print contract adjusted in recognition of the curtailment of the guarantee period. The titles will also continue to be printed by Trinity Mirror under a new five-year contract agreed between Mr Lebedev's publishing company IPL and Trinity Mirror.
"None of the significant punitive payments which would have been incurred in the event of termination of the contracts with Trinity Mirror Printing Limited and Daily Mail & General Trust plc are being activated by this proposal," INM said in a statement yesterday.
Independent Print Limited (IPL) paid the nominal sum of £1 for the titles and as part of the terms of the deal, INM will pay IPL £9.25m (€10.3m) over the next 10 months for use within the titles, in exchange for the Lebedev Company assuming all future trading liabilities.
The London titles made a loss of £12.4m in 2009. It is expected that the deal will completed in May, subject to gaining approval from the Irish Competition authorities.
The 300 staff at the two papers will transfer to IPL but will continue to operate from the current premises in Kensington, London.
INM chief executive Gavin O'Reilly said the sale was the most satisfactory and positive outcome for the titles, their staff and for INM's shareholders.
"The transaction will be immediately earnings-accretive for INM," he said. "After our successful refinancing in late 2009, this transaction marks an important milestone in the repositioning of our group and will allow INM to focus solely on its market-leading, cash-generative assets in Ireland, Northern Ireland, South Africa, Australia and New Zealand."
Alexander and Evgeny Lebedev both paid tribute to the support and commitment that the O'Reilly family had given to 'The Independent' over many years.
"Tony O'Reilly and his family have been stalwart, innovative and courageous investors who have allowed an important paper to provide some of the most authoritative and remarkable journalism, which has rightly won respect and admiration worldwide," Alexander Lebedev said in a statement.