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Sly Bailey, chief executive, Trinity Mirror Plc

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10:01 am, February 9, 2010
Trinity buys MEN Media but leaves Channel M on shelf

Trinity Mirror Plc today said it was buying GMG Regional Media from Guardian Media Group Plc for nearly £45m.

It said the acquisition, which includes MEN Media Ltd, publisher of the Manchester Evening News "reinforces Trinity Mirror's commitment to regional media and complements the group's existing portfolio and marketplaces".

It was also announced that Mark Dodson, chief executive of GMG Regional Media, had decided to leave the business.

Trinity, which owns the Liverpool Echo and Daily Mirror, is only paying £7.4m of the consideration in cash and is expected to make efficiency savings from combining the Manchester and Liverpool businesses.

MEN Media publishes 22 titles and GMG regionals also owns S&B Media which publishes the Surrey Advertiser and Reading Post.

Trinity Mirror will not be acquiring Channel M, the Manchester-based TV station, and two local newspapers in Woking.

GMG's regional businesses made an operating profit of nil in the 12 months to December 2009 and have gross assets of £8.7m. The total consideration is £44.8m is made up of £7.4m cash and £37.4m from the release of a long term printing contract.

MEN Media's newspapers are printed at Trinity Mirror's Oldham plant under a long term contract which is being released as part of the sale.

Trinity Mirror said it had exchanged contracts and expected the deal to complete on March 28.

Sly Bailey, Trinity Mirror chief executive, commented: "GMG Regional Media is a perfect strategic fit for our group. This acquisition, which includes the Manchester Evening News with its proud and rich journalistic heritage, together with the weekly titles and associated websites extends our reach across print and online and is a further step towards our strategic goal of creating a multi-media business of real scale."

Carolyn McCall, GMG's chief executive, said: "GMG is mandated to secure the future of The Guardian in perpetuity, and we have a strong portfolio which has to be in the right shape to achieve that goal. The group board and the Scott Trust have made the decision to sell in light of these strategic objectives. GMG Regional Media is a good business and a publisher of important newspapers."

Losses at The Guardian and The Observer, GMG's national titles, are widely reported to be running at £100,000 per day, which would mean that the cash proceeds from today's sale will subsidise the two newspapers for 74 days.

GMG said Mark Dodson, chief executive of GMG Regional Media, had "decided to leave the business". Ruth Spratt, managing director of MEN Media, is also leaving and David Sharrock, currently chief operating officer of GMG Regional Media, has been appointed as managing director of MEN Media.

McCall added: “The Manchester Evening News and its sister titles have made a huge contribution to the fortunes of the group for the best part of a century. GMG would like to pay tribute to all the staff for their hard work and achievement in a sector dealing with structural change as well as economic downturn.

“However, we believe Trinity Mirror, as one of the UK's biggest regional publishers, is best placed to develop this business in a market that is likely to consolidate further. We are therefore confident that this decision is in the best long-term interests of the regional business and its staff, as well as delivering real value for the Group.

“Mark Dodson has been a major part of GMG Regional Media's success over many years. He and his leadership team have shown creativity, courage and determination in a very tough media market. We thank them for that.”

Roger Hart of the Manchester office of Addleshaw Goddard acted for GMG.

Trinity's share price rose just over 1 per cent to 139.5p by early afternoon, following the 10am announcement.

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