Johnston Press in takeover speculation

REGIONAL newspaper owner, Johnston Press declined to comment on speculation that it may be a takeover target as its shares surged by 20.26% yesterday.

Malaysian media-focused investment firm, Usaha Tegas, is believed to have Johnston in its sights.

Johnston is currently in the midst of a rights issue, aimed at raising nearly €270 million that will go towards reducing its debt and strengthening its balance sheet.

When the Edinburgh-based publisher — which also owns a number of titles in the Irish market mainly through its ownership of the Leinster Leader Group — announced this plan last month, it also revealed that it had reached agreement to sell a 19.5% stake in the group to the Malaysian company.

“The strategic investment by Usaha Tegas, together with the proceeds of the rights issue, positions the business more strongly,” Johnston chief executive, Tim Bowdler, said at the time.

“Usaha Tegas’ knowledge and expertise in the media sector, as a whole, and its track record of investing in companies, will provide us with valuable insight and guidance through the current macroeconomic climate and assist the company in executing its business plan.”

However, Johnston Press, which also owns the Limerick Leader and Kilkenny People, was remaining tight-lipped when questioned about rising media speculation that Usaha Tegas is lining up the company for an overall takeover. A Johnston spokesperson said that the company does not comment on speculation.

In its most recent trading update — covering the 17 weeks to the end of April — Johnston said its group advertising revenue (although still strong enough in the Irish market) fell by more than 7% on a year-on-year basis and its net debt had reached £700 million (€887.2m).

Johnston’s share price was up by 27% at 73.75p in early trading yesterday before rowing back, slightly. The media group’s market value is now over £476m and some London analysts are suggesting it could attract a bid from its new Malaysian shareholder as it seems “fair value”.

Johnston also said recently that it is still open to further acquisitions here, thus upping its Irish regional newspaper portfolio further.