Johnston Press plunges after ‘no sale’

THE Johnston Press share price has plunged after it shelved plans to sell its 13 Irish newspaper titles.

The company failed to attract offers of an acceptable value to its board.

In confirming the termination of the sale process, the Edinburgh-based regional newspaper publisher said: “While there was considerable interest shown from both trade and financial buyers, the board decided that it was not a sufficiently high price to be in the company’s best interest.”

The company’s share price fell almost 40% to 19.25p.

It is thought Johnston will now continue to operate the Irish titles before attempting to sell them again once the credit markets improve and media asset valuations increase.

Johnston’s Irish business is still profitable and is expected to show another profit this year, albeit only around a half of the £8m (€8.9m) generated in the group’s last financial year.

However, the plan to sell the Irish titles was in order to cut the group’s debt levels. Those reductions are now likely to come about through closure of more titles in Britain and the loss of a number of jobs.

The Scottish company invested €236m in entering the Irish market four years ago – mainly through the acquisition of the Leinster Leader group.

Former Leinster Leader group head, John McStay, former Kilkenny People boss, Joe Hayes, and ex-Scottish Radio Holdings head, Richard Findlay, were seen as being the final shortlist of interested bidders.

It had been hoped that the Irish division would be sold by the end of last month, but once the process was extended into May, doubts over the successful raising of funding from the banks became more pronounced.

While no exact bid details are known, it had been speculated in the industry that the 13 titles could go as a job lot for somewhere between €38m and €50m.

Meanwhile, in a trading update covering the five months to May 9, Johnston yesterday said it had seen “greater stability over recent weeks”, even though total group advertising revenues for the period under review were down 34.4% on a year-on-year basis.