Investor seeks exit as PA's press gang splinters

The future of the Press Association, the 135-year-old organisation that provides news for almost all of Britain's newspapers, is being thrown into uncertainty as one of its major shareholders attempts to sell out.

United Business Media, which owns 17 per cent of PA's shares, has been in talks with a number of City institutions about selling the holding, which is worth up to £35m. But potential purchasers, including venture capitalists 3i and Cinven, have said they are not interested in just buying 17 per cent and want a larger holding.

PA, run by former journalist Paul Potts, has three other large shareholders: Trinity Mirror with 18 per cent, News Corporation with 16.5 per cent, and Daily Mail & General Trust with 14 per cent.

Sly Bailey, new chief executive of Trinity Mirror, is reviewing the group's businesses and may be keen to sell the PA stake, especially as Trinity Mirror has some £800m of debts.

However, News Corporation said: "We have no plans to dispose of our stake in the Press Association."

The Daily Mail's position is less clear, though it may be amenable to a decent offer.

The rest of the shares are owned by more than 15 smaller media companies.

PA's most recent accounts, for 2001, show it making a pre-tax profit of £10m on turnover of £52m. This would imply a market value of between £150m and £200m.

It has paid nearly £100m in dividends to shareholders in recent years, largely thanks to the sale of its Annova online business to Orange. "We are aware one major shareholder is willing to sell, but our other investors are quite pleased with us," said Steven Brown, PA's managing director.