United buys 10 titles to settle dispute

Click to follow
UNITED NEWSPAPERS is buying 10 music and cycling magazine titles from Northern & Shell as part of the settlement of a legal dispute over a magazine distribution agreement.

United is paying pounds 17m for the titles, which include Mountain Biker, Performance Cyclist, Guitar and Rock CD, while Northern & Shell is paying pounds 17m owed to United's subsidiary, United Magazine Distribution.

United said yesterday it would set aside in its results next week pounds 12m against the cost of terminating the distribution agreement and a more conservative valuation of the magazines.

However, this would be more than offset by a pounds 23m exceptional profit on the sale of Reuters Holdings shares. United plans to issue its results in accordance with FRS3, the new accounting standard.

The purchased titles will come under the wing of United Consumer Magazines. Graham Wilson, United's managing director, said it was too early to say whether any would be merged with existing titles.

Last month Northern accused United of suing itself as a ruse to get out of an unprofitable pounds 200m distribution contract with it and other publishers. It said the lawsuit was 'a device and a sham'.

United said yesterday the settlement released both parties from any litigation against the other in respect of the distribution agreement. This, signed last July, obliged UMD to distribute 64 titles produced by Northern and other publishers. The agreement would be automatically terminated on the award of any court judgment against UMD.

United said the titles were projected to make a gross contribution of pounds 1.7m in the next 12 months.