Regional paper publisher in bid talks
Friday 16 May 1997
Harry Lambert, the group's chairman and chief executive, is understood to have received tentative approaches from several regional newspaper groups, and has apparently held formal talks with one of them. Mr Lambert was unavailable for comment yesterday.
The sources said the publishers likely to have made moves to acquire the group included Northcliffe Newspapers, part of the Daily Mail and General Trust, Trinity International Holdings and Johnston Press. Southnews is understood to have shied away from making a bid because it believed the asking price was too high. Adscene has a market capitalisation of around pounds 31m on last night's unchanged closing price of 142.5p.
Adscene's shares have jumped over the past few weeks, leading to speculation that a bid was in the offing. Although Mr Lambert is known to have flirted with possible predators in the past, he may need to take decisive action soon as the company has experienced difficulties over the past year.
Adscene issued a profits warning this time a year ago, blaming slower- than-expected economic growth, snow in the Midlands, and a further rise in newsprint prices.
Investors have also become concerned about the strength of the company's management. Robert Broadley was appointed finance director in March but the group has failed to recruit a managing director despite several months of looking.
Analysts have expressed concerns that the publisher did not have sufficient management expertise to cope with its ambitious expansion strategy. In December 1995, Adscene paid pounds 19.5m for the Tamworth Herald group and the 51 per cent of the Lichfield Mercury group it did not already own. At the same time, it bought Emap's Kent newspapers for pounds 9.85m.
The markets have also reacted adversely to delays to the promised sale of the print division. The former finance director, Nigel Chevin-Hall, and printing director, Charles Grant-Salmon, resigned last November to head a proposed buyout of the printing division, but their offer does not appear to have been accepted by Mr Lambert.
Adscene publishes more than 80 regional newspapers in Kent, Nottinghamshire, Staffordshire, Lincolnshire, London, and the West Midlands.
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