Monday 16 September 2019

Trinity Mirror strikes sweeping media consolidation deal

New titles ‘an excellent fit’ says chief executive Simon Fox
New titles ‘an excellent fit’ says chief executive Simon Fox
John Mulligan

John Mulligan

The owner of the Daily Mirror in the UK has agreed to pay almost £127m (€144m) in cash and shares to buy Northern & Shell Group's publishing assets including the 'Daily Star' and 'Daily Express'.

The deal includes the acquisition of Northern & Shell's 50pc stake in the 'Irish Daily Star'.

The 'Irish Daily Star' is owned under a joint venture agreement with Independent News & Media (INM), the publisher of this newspaper.

That part of the transaction will require competition clearance in Ireland but, bar the change of ownership, the joint venture agreement itself will be unaffected. The wider deal will mark a significant change in the UK's media landscape.

It will also draw together newspapers with diametrically opposed political views and bring magazines including 'OK!' and 'New' into a single publishing fold.

Trinity Mirror said it believes the acquisition will create a "business of scale to better serve our readers and advertisers".

It will see the enlarged group reducing its reliance on advertising revenue, with almost 50pc of the wider group's sales being generated from circulation revenue.

It also brings an end to years of efforts by Trinity Mirror to seal an agreement with billionaire Richard Desmond's Northern & Shell group, which owns the 'Daily Express', 'Daily Star' and the other titles being acquired.

Mr Desmond owns Northern & Shell and is its chairman.

Trinity Mirror added that the benefits of the broader acquisition would include improved print and digital propositions, by reducing duplication, sharing content and "widening the breadth of editorial coverage".

"The board believes the acquisition is financially compelling and will deliver attractive returns to shareholders," it added, noting that it expects to be generating annual cost savings of £20m (€22.6m) before tax by 2020.

"There is a lot of sense behind this deal, which comes at a time when print advertising is falling at Trinity Mirror," said senior market analyst Fiona Cincotta at City Index.

"There are significant commercial synergies which are expected to result in some serious cost savings going forward," she said.

The enlarged group's digital portfolio will comprise a network of publishing websites delivering 234 million monthly unique browsers (excluding apps) and 963 million monthly page views (excluding apps and galleries).

More than 50pc of the audience is based in the UK. "Today's transformational transaction is a logical and natural next step in the evolution and consolidation of the media sector and will create a larger and stronger platform serving all stakeholders," Richard Desmond said.

Simon Fox, the chief executive of Trinity Mirror, said that the Northern & Shell titles are an "excellent fit" for the group.

The 'Daily Express' has taken an editorial line against immigration and also backed Britain leaving the European Union.

The 'Daily Mirror' has traditionally backed Britain's Labour Party and took a stance opposed to Brexit.

Shares in Trinity Mirror soared on news of the plan yesterday, rising as much as 10pc in London.

Irish Independent

Also in Business