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Tuesday, December 7, 2021

Daily Mirror publisher builds financial firepower for takeovers

The publisher of the Daily Mirror is building its financial firepower for more newspaper mergers as it grapples with soaring print costs.

Reach has extended its loan facilities from £65m to £120m, handing it the “financial flexibility” to pursue potential takeover targets.  

Industry insiders have predicted another wave of consolidation in regional news to counter the downturn in newspaper circulation and print advertising.

Newsquest, Archant and JPIMedia, the local news publisher controlled by newspaper entrepreneur David Montgomery, are all regarded as potential targets for Reach.

Newsquest was created in 1996 as a management buyout of Reed Regional Newspapers and floated the following year, before being bought in July 1999 by US newspaper publisher Gannett. Its 120 titles include the Oxford Mail and the Telegraph & Argus.

Privately owned Archant was founded in Norwich 170 years ago and owns 140 titles such as the Eastern Daily Press and the Ham & High in areas including Norfolk, Suffolk, Hertfordshire, Cambridgeshire and London.  

JPIMedia was founded in 2018 following the acquisition of Johnston Press assets by its creditors and owns newspapers such as the Scotsman and the Yorkshire Post.

Reach’s links to the gambling industry through chief executive Jim Mullen, a former boss of betting giant Ladbrokes Coral, makes it a potential suitor for the Racing Post, as its owner Exponent Private Equity prepares the ground for a sale.  

The move comes as Reach weighs further cost cuts to counter inflation-fuelled rises in newsprint and energy costs.

Mr Mullen said the longer-term effect was still emerging, but he would “continue to prioritise efficiencies to mitigate the impact”.

The warning sent Reach shares down 6pc to 283p in afternoon trading, bringing its market value down to £884m. It had hit £1bn in July for the first time since the financial crisis.

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