INDEPENDENT NEWS & Media (INM) confirmed yesterday that it has entered talks with wealthy Russian businessman Alexander Lebedev about the sale of its loss-making London newspaper titles.
It is understood that no consideration is likely to be paid for the Independentand the Independent on Sunday. But the deal will include a provision that will involve the London papers providing free copy to INM's newspapers around the world.
INM said the exclusivity period for the talks would expire on February 15th. It said there was “no certainty” that a deal would be agreed by the parties.
Mr Lebedev controls the London Evening Standardnewspaper, having bought a 75.1 per cent stake in January.
“It should be emphasised that these discussions are still preliminary at this stage and are subject to due diligence, agreement on the financial consequences of the transaction for INM, and a number of substantive contractual conditions being fully satisfied to all parties,” INM said.
The contractual conditions mentioned in the statement include the printing contract with Trinity Mirror. It emerged earlier this year that it would cost the company about €25 million to close the London newspapers. Much of this relates to the print contract with Trinity Mirror.
The London Independent titles have been a constant source of friction between INM’s board, led by chief executive Gavin O’Reilly, and rebel shareholder Denis O’Brien. Mr O’Brien has repeatedly called for them to be closed. They have never been profitable under INM’s ownership.
Earlier this year the company said operating costs at the London papers had been reduced by 25 per cent over the past three years and that it was on a path to reach break-even by late 2010 or early 2011.
The Independent’s editorial operations were also moved to the Daily Mail’s Kensington base as a cost-saving measure.
The London Evening Standarddeal involved Mr Lebedev buying the paper from the Daily Mail General Trust (DMGT) for a nominal sum and guaranteeing its losses for three years; DMGT retains a 24.9 per cent stake.
Latest ABC circulation figures for November show that the London Independentsold 186,557 copies a day, with 93,231 sold at the full cover price. The Independent on Sundayshifted 156,517 copies a week in the same month, of which 118,728 were at full price.
