Johnston acquires Emap titles for pounds 111m

Emap yesterday sold its regional newspaper business - the original cornerstone of its burgeoning media empire - to Johnston Press, the Edinburgh- based newspaper company, for pounds 211m. The 65 titles being sold include the Stamford Mercury, first published in 1695 and one of Britain's oldest newspapers.

Robin Miller, Emap's chief executive, said: "It's clearly a momentous day for Emap. We were founded on local newspapers back in 1953 as East Midland Allied Press. But spending pounds 500m in the last couple of years has caused us to think where our priorities lie."

Johnston, which fought off competition from rivals including Midland Independent Newspapers, is funding the deal with a one-for-two rights issue at 169p, raising pounds 11m. Buying Emap's regional titles increases Johnston's position in the UK regional newspaper market from 11th to fifth. In the year to March, the Emap titles made on-going operating profits of pounds 13.1m on $100m sales.Shares in Johnston rose 4p to 210p, though Emap fell from near an all-time high to close 27p lower at 675p.

Although the deal more than halves Emap's borrowings to pounds 150m, Mr Miller insisted getting the balance sheet back in shape was not the main reason for selling the regional newspaper business. "There are better and different things for us to spend our money on."

Emap has expanded rapidly into radio, specialist consumer and business magazines and the exhibitions market. This year, it paid pounds 142m for the French magazine interests of media giant CLT, which include the Tele-Star television listings guide with a circulation of 2 million. The company is keen to boost subscription revenue, currently 46 per cent of turnover, by expanding its fledgling electronic publishing activities. Further expansion in the US business information market is also on the cards.

News of the deal came as Emap announced a 35 per cent increase in pre- tax profits to pounds 86.5m on sales 29 per cent higher at pounds 705m for the year to March. The profit figure excluded an pounds 8.2m charge taken to restructure business acquired during the year. Radio was the strongest performer with operating profits up 178 per cent at pounds 14.6m, helped by contributions from recent acquisitions of TransWorld Communications and Metro Radio.

The drop in Emap's share price surprised analysts, who argued it had sold out on very good terms. "It's right at the top end," said Mike Hilton at Kleinwort Benson. "To get pounds 211m for a slow-moving newspaper business making pounds 11m is a pretty good price."

Emap argued the deal would be earnings-neutral but Mr Hilton disagreed, saying the high exit multiple of 30 times post-tax earnings meant his pre-tax forecast for the year to March 1997 would be raised from pounds 102m to pounds 110m.

The deal marks the latest stage in a period of rapid consolidation in the market. The departure of big media players like Emap and Reed and Thompson leaves Pearson's Westminster Press as one of the few regional chains still owned by a large publisher.

PROMOTED VIDEO
News
Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
Sport
Lewis Hamilton walks back to the pit lane with his Mercedes burning in the background
Formula 1
Arts and Entertainment
The new characters were announced yesterday at San Diego Comic Con
comic-con 2014
Sport
Arsenal supporters gather for a recent ‘fan party’ in New Jersey
football
Arts and Entertainment
No Devotion's Geoff Rickly and Stuart Richardson
musicReview: No Devotion, O2 Academy Islington, London
News
i100
Sport
sportDidier Drogba returns to Chelsea on one-year deal
Arts and Entertainment
The Secret Cinema performance of Back to the Future has been cancelled again
film
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Life and Style
Balmain's autumn/winter 2014 campaign, shot by Mario Sorrenti and featuring Binx Walton, Cara Delevingne, Jourdan Dunn, Ysaunny Brito, Issa Lish and Kayla Scott
fashionHow Olivier Rousteing is revitalising the house of Balmain
News
i100
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
News
people
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior Risk Manager - Banking - London - £650

£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

The benefits of being in Recruitment at SThree...

£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

Test Analyst - UAT - Credit Risk

£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Evan Davis: The BBC’s wolf in sheep’s clothing to take over at Newsnight

The BBC’s wolf in sheep’s clothing

What will Evan Davis be like on Newsnight?
Finding the names for America’s shame: What happens to the immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert?

Finding the names for America’s shame

The immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert
Inside a church for Born Again Christians: Speaking to God in a Manchester multiplex

Inside a church for Born Again Christians

As Britain's Anglican church struggles to establish its modern identity, one branch of Christianity is booming
Rihanna, Kim Kardashian and me: How Olivier Rousteing is revitalising the house of Balmain

Olivier Rousteing is revitalising the house of Balmain

Parisian couturier Pierre Balmain made his name dressing the mid-century jet set. Today, Olivier Rousteing – heir to the house Pierre built – is celebrating their 21st-century equivalents. The result? Nothing short of Balmania
Cancer, cardiac arrest, HIV and homelessness - and he's only 39

Incredible survival story of David Tovey

Tovey went from cooking for the Queen to rifling through bins for his supper. His is a startling story of endurance against the odds – and of a social safety net failing at every turn
Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride