Scotsman owner Johnston Press has put itself up for sale after months of speculation around the future of the business.
The firm, which has a stable of titles including the i newspaper, Buchan Observer, Fraserburgh Herald, Stornoway Gazette, Ellon Times, Deeside Piper and Mearns Leader said it is seeking offers for a takeover.
The decision comes as a result of a strategic review, which the group launched in 2017 to assess options for refinancing £220 million of bonds due for repayment next year.
Last night the company said it was not currently in discussions with any potential buyers however it is expected that the firm could be sold within months.
Speculation about the publisher’s future has been mounting since it announced the strategic review in March last year.
In August, the company’s share price surged by as much as 70% in afternoon trading amid rumours that a mystery buyer was quietly snapping up more stock.
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Bidders for the business could include activist shareholder Custos Group, which already owns more than 20% of Johnston Press.
It is headed by Norwegian entrepreneur Christen Ager-Hanssen and reportedly said in August that it would be a prospective bidder for the business if it went into administration.
At its most recent trading update, Johnston Press reported a hit to revenues, mostly due to changes in Google and Facebook algorithms.
Total revenue fell 10% to £93m for the first half of 2018, despite a boost from the i newspaper.
In the same period, the company swung out of the red with interim pre-tax profits of £6.2m against losses of £10.2m a year earlier, although the turnaround was largely thanks to a one-off £8.8m accounting gain.
John Moore, senior investment manager at Brewin Dolphin Scotland, yesterday said: “Johnston Press’s troubles have been well-documented over the past few years.
“Crippling debt, combined with declining print revenues, starved the business of cash for investment and created an almost perfect storm for the owner of the i, The Scotsman, and a sprawling collection of local newspapers. Shareholders have endured a torrid time, watching the stock fall from the equivalent of £59 per share in 2004 to just over 3p per share last week.
“How this evolves will be an interesting statement over the wider UK media scene. While the i is very much the gem in Johnston Press’s crown – it is one of few highly profitable national newspapers in the UK – the company’s debt pile and pension fund obligations will hang over any deal. Although there are no confirmed suitors so far, some have declared interest in the past and could re-emerge now with today’s announcement.”
