Heseltine clears new ownership for 'Independent'

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The Independent Online
MICHAEL Heseltine, President of the Board of Trade, yesterday cleared the transfer of the Independent and the Independent on Sunday to a consortium led by its Italian and Spanish shareholders and Mirror Group Newspapers.

He said the case was urgent if the titles were to continue. He also approved an increase in the stake held by the Dublin-based Independent Newspapers from 24.99 per cent to 29.99.

He rejected calls, led by the Irish group and backed by an all-party group of MPs and representatives of journalists on the Independent and Independent on Sunday, for conditions to be attached to the transfer of ownership, including guarantees of editorial independence. He concluded such guarantees were unnecessary.

Voting control in the boardroom, under the consortium agreement, will lie with the publishers of La Repubblica and El Pais, the Independent's Italian and Spanish shareholders, on such issues as the election of directors and changes in the articles of association. MGN, with a shareholding of between 25 and 30 per cent, will assume responsibility for the commercial operations of Newspaper Publishing plc, publisher of the Independent titles.

Mr Heseltine based his decision to allow the consortium offer to proceed on the financial condition of the company, making heavy losses after a fall in circulation in a depressed advertising market. He said: 'In the light of the inquiries which my department has conducted . . . I am satisfied that the Independent and the Independent on Sunday titles are not economic as going concerns.'

The consortium, which includes Andreas Whittam Smith, editor of the Independent, said all conditions relating to its pounds 74.7m offer had been satisfied. After twice revising its take-over terms in the face of opposition from non- consortium directors and the purchase of a stake by Independent Newspapers, headed by Tony O'Reilly, the multi-millionaire head of Heinz, the consortium now speaks for 65.2 per cent of Newspaper Publishing shares.

Independent Newspapers, now Newspaper Publishing's single largest shareholder, said yesterday it noted the absence of any conditions attached to Mr Heseltine's consent 'despite widespread concern expressed in Parliament . . . and elsewhere'.

Independent journalists yesterday condemned Mr Heseltine's unconditional consent and urged the consortium to offer board representation to Independent Newspapers. They called on officials of the National Union of Journalists to examine the legal implications of the decision with a view to seeking a judicial review.

Enduring values, page 2

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