By Jason Nisse
By Jason Nisse
07 November 1999
Gannett, the giant US publisher, is leading the race to buy Regional Independent Newspapers (RIM) , the publisher of the Yorkshire Post , which is to be put up for sale by its venture capital backer, Candover.
The price tag for the business, which was only bought out of United News & Media for £360m two years ago, has been set at £500m.
A previous plan to float the company is understood to have been dropped. And Candover's hopes of developing it through a "buy to build" programme have been thwarted by the high prices being demanded for rival regional newspapers.
RIM is understood to be looking for one small acquisition before Candover puts the business formally up for sale next year. CSFB, the merchant bank which advised on RIM's unsuccessful £910m bid for Mirror Group earlier this year, is expected to handle the sale.
Having been outbid for Mirror Group, RIM looked at the Ulster newspapers which Trinity Mirror must sell to placate Stephen Byers, the Secretary of State for Trade and Industry. However, it withdrew after the bidding reached £250m. Gannett, Associated Newspapers and Independent Newspapers, publisher of The Independent on Sunday, are still in the hunt.
Gannett, which paid £904m for regional publisher Newsquest in June, has made no secret of its desire to buy more papers in the UK. A rival publisher said yesterday that the US company is a clear favourite to buy RIM.
Leeds-based RIM is headed by Chris Oakley, the former journalist who led the 1991 buy-out of Midland Independent Newspapers (MIN) from Canadian businessman Ralph Ingersoll. The Birmingham company was subsequently bought by Mirror before it merged with Trinity.
Trinity Mirror admitted last Thursday that circulation figures for the main MIN titles had been falsified for at least six years and made a provision of £20m to cover possible claims by advertisers. Philip Graf, chief executive of Trinity Mirror, refused to lay the blame directly at anyone's door. But a senior Trinity Mirror source said it was hard to understand how Mr Oakley could not have known about the problem.
In a terse statement, Mr Oakley said: "I have asked Trinity Mirror to clarify what it believes has happened because the statement raises more questions than it answers." Indeed, evidence is emerging that Mirror Group directors were aware of the problems at MIN before the merger with Trinity in July.
The head of the Birmingham papers, Roger Chappell, was replaced in May by Geraldine Aitken, a former Trinity executive, who launched an investigation into "irregularities". This was continued after the merger by Mark Haysom, a Trinity Mirror director. He confronted a circulation manager, Ian Hinton, who confirmed a circulation scam had been taking place. Mr Hinton is now helping Trinity Mirror with its investigation.
Trinity Mirror has talked about taking legal action, probably against PricewaterhouseCoopers (PwC), the accountants, though this now appears unlikely. The firm not only audited MIN, and was its reporting accountants when it floated, but also audited Mirror Group, advising on the purchase of MIN and the merger with Trinity, and is an adviser to the Audit Bureau of Circulation, which checks newspaper circulation figures. PwC declined to comment.Reuse content