Trinity Mirror pays £285m for Southnews

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The Independent Online

The rapid consolidation of the UK's regional newspaper industry continued yesterday with Trinity Mirror buying Southnews for £285m to expand its presence in south-east England.

The rapid consolidation of the UK's regional newspaper industry continued yesterday with Trinity Mirror buying Southnews for £285m to expand its presence in south-east England.

Trinity Mirror, which owns The Mirror newspaper, will pay 1,200p a share in cash for Southnews, a premium of 57 per cent over the company's close on Thursday. Southnews shares closed up 55 per cent at 1,180p.

Trinity Mirror is already the biggest local newspaper publisher in the UK, with 19 per cent of the market. The group said the purchase of London-based Southnews, which publishes 84 paid-for and free titles, including the Croydon Advertiser and Kensington & Chelsea Times, would be earnings enhancing in the first year.

Trinity shares closed down 4 per cent at 446.5p.

"We're already strong in the North, the Midlands and Scotland and this purchase will bring better balance to the business by increasing our presence in south-east England," Trinity's chief executive Philip Graf said.

He added that "it also fits very well with the existing business we have in and around London".

"They paid a premium for control, because there aren't many newspaper assets left to buy in the UK," one analyst said. "I don't think it will particularly enhance shareholder value but there are strategic benefits."

The company said it would apply to have the purchase of Southnews proceed without a report from the Competition Commission because none of group's titles has an average daily paid-for circulation of more than 50,000.

Trinity Mirror, which publishes 170 titles, said it will move to slash costs by £4m in its first year of ownership of Southnews. Mr Graf said savings will be made from the de-listing of the company; printing part of the group's newspapers using Trinity Mirror presses; and bringing national advertising sales in-house. He also expects costs savings to be made in administration and backoffice staff, though he maintained there would be few redundancies.

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