Gannett Seeks Permission To Bid For Newscom

US publishing giant, Gannett, has written to the Department of Trade and Industry (DTI) to seek permission to make formal takeover bid for UK regional newspaper publisher, Newscom. Gannett has decided to find out whether a Competition Commission investigation would prevent such a takeover before placing a formal offer with the Stock Exchange.

Earlier in the year Gannett acquired Newsquest, at the time the UK’s largest regional newspaper group, in a deal worth £904 million (see Newsquest Receives £904m US Takeover Offer). Newsquest publishes 63 paid-for daily and weekly newspapers and 120 free weekly titles, giving a total weekly circulation of 7.8 million copies. The ownership of Newsquest by Gannett may lead the Competition Commission to question a takeover of Newscom, which has a total weekly circulation of 2.7 million copies across 119 titles.

Gannett’s request to the DTI follows a unsolicited approach to Newscom in November. At the time Gannett made an informal proposal which the Newscom Board rejected as unrealistic and advised its shareholders to decline. At 3:50pm today, Newscom’s stock had shot up by 222˝p (22%) to 1,240p. This values the group at £303 million; at close yesterday, Newscom had a market value of £249 million.

It is expected that other companies will now follow Gannett’s lead and apply to the DTI for permission to make a takeover bid for Newscom. The DTI’s consent process, along with possible referral to the Competition Commission, can take up to six months.

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Newscom: 01703 424 777 Gannett/Newsquest: 0181 640 8989 Department of Trade and Industry: 0171 215 5600