Johnston Press yesterday strengthened its position as Britain's fourth-largest regional newspaper publisher with the £560m acquisition of Regional Independent Media, the owner of the Yorkshire Post.
The deal increases Johnston's weekly circulation to 8.8 million copies and helps close the gap on the market leader, Trinity Mirror, which has a 20 per cent share of regional newspaper sales.
Tim Bowdler, Johnston's chief executive, said there was no prospect of a bid battle breaking out for RIM, as happened two years ago, because the owner of the business, the venture capital group Candover, had given irrevocable undertakings to accept Johnston's offer.
RIM's chief executive Chris Oakley will make £4.5m out of the sale. Mr Oakley, along with RIM's three other executive directors, is leaving the business. RIM's chairman, the former Tory Cabinet minister Sir Norman Fowler, will also step down.
Johnston is funding the acquisition with a £220m rights issue and new bank debt. Shareholders are being offered two new shares for every five held at a price of 280p.
This is the third acquisition that Johnston has pulled off in the last six years. In 1996, it paid £211m for the regional newspaper interests of Emap and then it bought Portsmouth and Sunderland Newspapers for £266m in 1999.
Mr Bowdler, said there was an excellent geographic fit between Johnston's regional newspapers and those of RIM and said the combined group expected to generate £9m in cost-savings. RIM is Britain's fifth-biggest regional newspaper group with 56 titles and weekly aggregate sales of 3.3 million.
The deal faces no regulatory hurdles, the competition authorities having given Johnston approval to bid for RIM in November, 2000.
Mr Bowdler said he expected to complete the takeover in April, subject to shareholder approval.
Johnston also said that pre-tax profits for last year rose 5 per cent to £68.5m. Despite the discounted rights issue, the shares ended 7 per cent higher at 367.5p.Reuse content