New business paper drops AIM plans

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PLANS to float a new, business-only newspaper, edited by the maverick magazine publisher Tom Rubython, on the Alternative Investment Market have been dropped after meeting strong opposition from potential investors in the City.

Mr Rubython had hoped to list Sunday Business on AIM, the junior stock market for small and growing companies, as part of a pounds 12m fund-raising exercise for the racy 200-page, six-section national title due to be launched next month.

But after courting City institutions over the last 12 months, Mr Rubython now says he wants to keep Business Newspapers (UK), the publisher of Sunday Business, in private hands for the time being.

"We don't need AIM," he said. "If we don't have to do it we won't, because it is very expensive and there is no liquidity in AIM shares."

With mystery still surrounding the identity of the backers of Sunday Business, it remains unclear how the extra money will be raised. Mr Rubython said current working capital requirements to produce dummy issues were being met by the reported pounds 3m the Dutch publisher VNU paid last year to buy Business Age, the magazine he founded.

He insisted pledges had been received for the extra pounds 9m he needs before Sunday Business is launched. "But we haven't asked anybody for any money yet."

Mr Rubython is understood to have received a cool response from would- be shareholders concerned about the wisdom of launching a dedicated business title in direct competition to the Sunday Times, the market leader owned by Rupert Murdoch. Broadsheet titles are still reeling from the impact of Mr Murdoch's price war unleashed 18 months ago. A similar tactic could be deployed to strangle the new paper at birth.

Concerns about the commercial logic of the launch have also been aired by advertisers who question the appeal of a paper that Mr Rubython himself admits will only be an additional purchase for readers. At 85p a copy, Sunday Business aims for an immediate circulation of 150,000 and plans to move into profit within three years. Some 65 journalists are being lined up to join the title, most of them from the trade press.

The paper is being launched three weeks after London Financial News, a more specialised City weekly run by former Mail on Sunday journalist, Clive Wolman, which is targeting financial services professionals.