The owner of Daily Mirror has agreed to buy Express Newspapers and all other Northern & Shell publishing assets from Richard Desmond for a sum of £126.7m it has been reported.
The deal will see Trinity Mirror; who own Daily Mirror, Sunday Mirror and Sunday People take over control of Northern & Shell’s Daily Express, Sunday Express, Daily Star, Daily Star Sunday and celebrity magazines OK!, New! and Star.
Talks of the sale were announced last September but the deal between the two had been on cards for a while.
Adding to the buyout, Trinity Mirror have also agreed to invest £70.4m in staff pension schemes through to 2027.
Share prices of Trinity Mirror surged to almost 15% with investors attracted to the financial benefits of one of the most significant merger of British national newspaper companies in decades.
Change in political views after the merger?
Express Newspapers have a history of having front pages on showbiz, weather, migration etc aimed at older and conservative audience and it would be a brave move to change that stance.
Likewise they are also Eurosceptic and were among the newspapers who discouraged the UK’s decision to join the common market in 1971.
Trinity Mirror chief executive Simon Fox claimed the deal to be a wise investment and mentioned the editorial position of all the titles will remain independent after the sale.
Simon Fox told Radio 4 Today: “The Mirror is not going to go right-wing and the Express is not going to go left-wing They will absolutely all have editorial independence. Decisions on what goes into each title will be entirely down to the editors.”
The move is seen as Trinity Mirror’s attempt in making £20m in savings and £9.3m in content generation which might lead to job cuts at their newly acquired titles.
“For example, [instead of] sending two reporters to a football game, we can send one,” Fox added.
With no decisions made about movements of staff, Express employees will continue to operate from Northern & Shell’s Lower Thames Street offices.
Based in Canary Wharf, Trinity Mirror has agreed a 10-year lease, with a five-year break clause, to continue to use part of Northern & Shell’s building in the City.
End of the Richard Desmond era?
Desmond, who bought the Express newspapers in 2000 for £125m will get 25 million shares in Trinity Mirror worth £20m making him the third-largest shareholder with a 9.4% stake.
Being the proprietor of Northern & Shell, Desmond will get most of the £106.7 cash portion of the deal.
As a part of the agreement, Desmond will have to spend £32m on advertising over next five years with Trinity Mirror titles.
Trinity Mirror’s Fox made it clear that Desmond will not be on the board like all other shareholders which marks the end of the 43-year-old billionaire’s publishing career.
Too much power with Trinity Mirror?
There is a fear among Britain’s CMA that Trinity Mirror will have too much power over political agenda as they will have control over 24% of UK’s national newspaper sales.
Trinity Mirror owns a about 200 regional newspapers including Daily Record in Scotland and others including Birmingham Post, Manchester Evening News and Liverpool Echo.
The regulator might scrutinise this deal from going through and may look to implement an initial enforcement order (IEO) to stop the two publishers integrating operations for a period of time while it looks at the deal.
There will be an option for the Cultural Secretary to intervene if a public interest issue such as media plurality will be considered.
An approval from Trinity Mirror shareholders will need to be authorised who will vote on it in the next two weeks.
Newspaper circulations for Trinity Mirror and Northern & Shell’s national titles in December, according to ABC’s monthly news brands report (Guardian)
Daily Mirror: 581,877
Sunday Mirror: 493,069
Sunday People: 191,188
Daily Express: 364,933
Sunday Express: 317,893
Daily Star: 391,509
Daily Star, Sunday: 239,853 – 239,853