Johnston defends regional media mergers

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The Independent Online

The consolidation sweeping Britain's regional newspaper industry does not threaten competition in local media markets, Tim Bowdler, chief executive of Johnston Press said yesterday.

The consolidation sweeping Britain's regional newspaper industry does not threaten competition in local media markets, Tim Bowdler, chief executive of Johnston Press said yesterday.

Johnston, Guardian Media and Newsquest, a division of the US giant Gannett, have requested regulatory clearance to mount estimated £500m plus bids for Regional Independent Media, the publisher of the Yorkshire Post. A decision is due in late October.

"If you look at the advertising market places we face intense competition from a wide variety of media," Mr Bowdler said. "These are not monopolies. People get news and information from many sources.

"Our hope, and we've been lobbying strongly, is that the rules should be relaxed as far as they apply to the regional press," he added. The Government is to publish a communications white paper in the autumn on digital convergence and media ownership. Currently, any sale of newspapers with paid circulation above 500,000 is referred to the Competition Commission.

The past year has seen the regional press sector become a hotbed of acquisition activity. If a takeover of RIM is allowed, it could leave 60 per cent of the regional press in the hands of just four groups.

Trinity Mirror is the biggest owner with a 19 per cent market share, while NorthCliffe, a division of Daily Mail & General Trust, and Newsquest each have a 14 per cent share. Johnston trails with a 10 per cent share, though a successful bid for RIM, which has 4.5 per cent share, would move it up the table.

"It's a good fit," Mr Bowdler said, commenting on RIM whose titles in Yorkshire do not overlap with Johnston's papers in Scotland, north-east England and on the south coast. "It would be a deal we could finance through borrowings but we would probably combine borrowings and a rights issue."

His comments came as Johnston reported a 36 per cent jump in interim pre-tax profit to £35.2m, boosted by the acquisition of Portsmouth & Sunderland Newspapers in June 1999. Advertising volumes, up 9 per cent, were helped by strong gains in recruitment and national display advertising.

Johnston shares closed down 2.5p at 370p. The interim dividend was increased by 20 per cent to 1.5p.

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