Johnston Press has this morning confirmed media speculation that it is in negotiations to buy the i newspaper from Indpendent Print Limited.
In a statement JP said: “The Board of Johnston Press plc notes the recent media speculation and confirms that it is in late stage discussions with Independent Print Limited (“IPL”) for the potential acquisition of the business and certain assets of the i.
“There can be no certainty that the discussions between the Company and IPL will lead to any definitive agreement concerning the possible acquisition or as to the final terms of any such agreement. Completion of the acquisition would be subject to the approval of shareholders of the Company.”
The consideration for the proposed acquisition is likely to be £24 million, to be provided from the Group’s existing cash resources. In the year ended 30 September 2015, the i had unaudited carve-out operating profit of £5.2 million.
The JP board believes that, if consummated, the acquisition would provide the following key benefits:
- Greater reach: The combination would create the UK’s fourth largest print publisher with over 600,000 paid copies a day
- Increased scale: Greater reach would improve the ability to gain a greater share of the national advertising market
- Growing revenues: i has growing circulation revenues, and new opportunities arise from: a proposed digital product; new geographic markets; and from potential cross-selling of i’s advertiser base and vice-versa
- Accelerated digital transformation through: leveraging Johnston Press’ digital expertise to fully realise the i brand across digital platforms; the extensive Johnston Press network enables cross-promotion to grow audiences at minimal cost; it is expected that the regionally-oriented digital display network 1XL will be enhanced by the addition of a national brand.
It is also expected that the acquisition would be cash generative and immediately earnings enhancing.
A further announcement will be made when appropriate.