The Scottish newspaper industry was thrown into turmoil last night following the revelation that the Glasgow Herald is considering mounting a bid for its main rival, the Edinburgh-based Scotsman.
Insiders at Caledonian Publishing, owners of the Herald, confirmed that the company has written to Thomson Regional Newspapers, owners of the Scotsman, expressing interest in buying the paper. Thomson Corp of Canada announced the sale of the Scotsman and its other Scottish titles, including Scotland on Sunday and the Aberdeen Press and Journal, last month.
Analysts say Caledonian's bid is "serious" and that a funding package, backed by Robert Fleming, the merchant bank that owns 58 per cent of Caledonian, is in place. Although the Glasgow-based company is likely to face stiff competition from London media organisations, executives are understood to be keen to ensure that the paper remains in Scottish hands.
Caledonian is one of 11 companies believed to be preparing bids for Thomson's Scottish titles. The Mirror Group, publishers of the Glasgow Daily Record, and Associated Newspapers, publishers of the Daily Mail, are understood to be in the running, along with the Dundee-based DC Thomson Corp. and the Falkirk-based Johnston Press.
None has so far confirmed its interest. The only group publicly to declare its hand is a consortium of Tory businessmen led by the Glasgow lawyer Professor Ross Harper. It is not considered a serious contender.
If Caledonian makes a formal bid, it would almost certainly be referred to the Monopolies and Mergers Commission since the company would control all of Scotland's large quality newspapers. Bidders are expected to examine the Scotsman's accounts next week and formal offers are likely to be submitted by the end of September.