Mirror bids for Westminster

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The Independent Online
Mirror Group and Independent Newspapers, the Irish newspaper group controlled by Tony O'Reilly, yesterday threw their combined hat into the ring for Westminster Press, the 60-strong group of regional titles being sold by Pearson.

The two companies, which share control of the Independent, are one of four groups bidding, sources close to the talks said. The two wrote yesterday to Lazard Brothers, the investment firm handling the auction.

Also confirmed as a bidder was Newsquest, the regional newspaper group, which yesterday sold pounds 12m worth of regional titles to Midland Newspapers, the struggling owner of the Birmingham Post. The deal will see the transfer of seven free newspapers and four magazines.

Other bidders for Westminster are thought to be Trinity, owners of the Thomson newspaper titles, and Northcliffe, the regional newspaper group owned by the Daily Mail & General Trust. United News & Media, also rumoured to be interested, is more likely to resume talks with Blenheim, the exhibitions company, leading to a possible deal within weeks.

Westminster Press is one of the last regional newspaper groups still held by a media conglomerate. Pearson, which has been investing heavily in television and electronic publishing, expects to raise pounds 300m from the sale, although bidders say the assets are worth far less.

At least two of the bidders believe the company, which includes the Northern Echo and the Brighton Argus, has been subjected to over-zealous cost-cutting by Pearson in advance of a sale. "They have been guilty of window-dressing, and any one who buys this will have to put money in," said a senior source.

Analysts confirmed that view last night, suggesting many of the titles suffer from plunging circulations and stagnating advertising revenues.

However, newspaper groups with existing UK titles could extract value from the chain, analysts said. And the eventual winner could sell some of the titles following a sale.

It is understood that John Makinson, the Pearson executive directing the sale, has prepared a backup plan to break up the group and sell parts to more than one buyer. The move is a second-best option, however, and a single buyer is still preferred.