Predatory Newsquest plans pounds 100m float
Newsquest Media Group, the regional paper company formed by a management buyout at the end of last year, is floating on the market. The move will make the chairman a multi-millionaire, and could spark another round of consolidation.
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Your support makes all the difference.Newsquest Media Group, Britain's third-largest regional newspaper group, is to raise around pounds 100m when it floats on the main market next month. Jim Brown, chairman, said the money would be used in part for further substantial acquisitions, and he hinted that the group could make a move on United News & Media's regional newspaper group if it came up for sale.
Mr Brown, who engineered the pounds 210m buyout of the group from Reed International, will be worth about pounds 4m through the deal. He will, together with five other senior management, own roughly 5 per cent of the company after the flotation.
Newsquest, which owns 173 newspapers, including the world's oldest newspaper, the Berrows Worcester Journal, will be valued at around pounds 500m.
City analysts were divided over whether Newsquest had chosen the right climate to come to the market. Some brokers have forecast a sharp downturn in advertising revenue which would hit regional newspaper stocks hard. However, Derek Terrington, media analyst at Teather & Greenwood, said there was no substance to such fears. Newsquest was well-placed to expand in an industry which had been consolidating over the last 18 months.
Mr Brown said Newsquest would "have to take a look" if United Provincial Newspapers came on the market.
Kohlberg Kravis Roberts which backed Newsquest's management buyout and owns a 73 per cent stake will retain around 40 per cent of the business after flotation.
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