Johnston to pay pounds 30m for Courier

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Johnston Press, the local newspaper publisher based in Edinburgh, is expanding through the pounds 29.4m acquisition of the Halifax Courier newspaper group.

Eight titles are involved, including the Halifax Evening Courier, and the three biggest newspapers on the Isle of Man.

The deal, subject to the approval of shareholders and the Department of Trade and Industry, includes pounds 24m for the Courier's trading activities and pounds 5.4m for cash and investments, with up to pounds 1.5m for investment properties. Johnston is paying a mixture of cash and up to 2.5 million new shares.

A pounds 7.5m conditional placing of 1.2 million shares at 620p has been arranged.

Courier shareholders will also receive a special dividend of pounds 5.1m.

The purchase boosts Johnston's turnover by more than 11 per cent. In 1993, Halifax recorded sales of pounds 9.97m, made pre-tax profits of pounds 2.7m and had net assets of pounds 11m.

Johnston's pre-tax profits were pounds 12.5m, up 28 per cent, on turnover of pounds 86.3m. The final dividend is 4.5p.

Its 70-strong stable of local newspapers generated about 75 per cent of profits. The rest came from the bookbinding and library bookselling businesses.

Frank Johnston, chairman, said it should be reasonably easy to improve the Courier's profitability. The shares rose 2p to 667p.