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.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
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

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable