Major Publishers Withdraw From SMG Auction

Two of the UK’s leading newspaper groups have been priced out of the bidding for the publishing assets of SMG, according to a report in today’s Independent.

The Daily Mail & General Trust and Guardian Media Group were seemingly unwilling to match SMG’s valuation of the titles which include The Herald and Sunday Herald. Eight other bidders will now go forward to the second round of the auction.

The Barclay Brothers, who own The Scotsman newspaper, are believed to have submitted the highest bid of £220 million but there is a concerted campaign north of the border to prevent them acquiring the SMG titles. The Barclays have sought to avoid regulatory obstructions by bidding through their Ellerman Investments vehicle but Scottish politicians and media organisations have called for the matter to be referred to the Competition Commisssion.

A number of regional publishing groups remain in the running for the Herald titles as well as a consortium that includes Independent News and Media. In addition, David Montgomery, the former chief executive of Mirror Group, is fronting a bid from venture capitalists 3i while Candover, with the backing of ex-RIM chief Chris Oakley, has also made it through the first round of bidding.

SMG, which has amassed debts of around £400 million, is selling its newspaper and magazine business in order to stabilise finances and concentrate on the more lucrative fields of television and radio.

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