Trinity considers bid for Argus newspapers: Offer would challenge proposed buyout by management

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The Independent Online
TRINITY International, the regional newspapers group, is considering bidding for Argus Press newspapers, challenging a management offer being prepared by Kimble Earl, the Argus chief executive.

Trinity has requested a copy of the sale memorandum, which Morgan Grenfell expects to issue in two weeks. Other prospective bidders are Pearson, Reed-Elsevier, Daily Mail and General Trust, United Newspapers and EMAP.

Trinity, which owns the Liverpool Echo and the Daily Post, bought the Scottish and Universal Newspapers group from Lonrho last year, and is keen to expand its provincial titles further.

The Argus newspaper division, which includes South London Press, the Reading Chronicle and 25 other newspapers in the South of England, has just moved back into profit and could fetch up to pounds 30m if sold in one piece.

It is a division of Argus Press, the publisher bought from BET for pounds 207m in 1988 in an ill-fated leveraged buyout. After a restructuring last year Argus Press is now 51 per cent controlled by banks led by Chemical Bank.

Pre-tax profits at Trinity increased from pounds 13.3m to pounds 16.9m in the 52 weeks to 26 December. The final dividend was lifted from 5.6p to 6p, making a total of 8.7p. Receipts from the pounds 24m rights issue last March increased earned interest. Earnings per share rose from 15.6p to 17.1p.

The UK businesses increased operating profits from pounds 7.9m to pounds 14m. About pounds 2m of the improvement was from the SUN purchase, and the sale of the papermaking and packaging arm contributed a pounds 1.7m profit.

The group has seen improving revenues from display advertising since the second quarter of last year. However, classified advertising remains depressed.

The contribution from Canadian and US newspapers fell from pounds 3.3m to pounds 2m after a pounds 1.5m provision for closure and redundancy costs. Canadian sales were especially hit by the depressed economy and the restructuring there.

Group gearing was reduced from 28 per cent to 14.5 per cent.

Canada's newspapers, page 29