Yahoo Finance Trinity Mirror takeover of Express titles at risk from government intervention
Trinity Mirror’s plan to buy a string of newspapers from Richard Desmond’s media empire has hit a hurdle with the Government ready to block the deal on public interest grounds.
Culture Secretary Matt Hancock said he was “minded to” issue an intervention notice, after the Competition and Markets Authority (CMA) examined the £126.7m sale to Trinity of the Daily Express and Daily Star titles by Northern & Shell.
Mr Hancock said that having considered a “broad range of evidence” about the acquisition, there is potential to halt it under the Enterprise Act.
The Secretary of State has now asked for more information from both Trinity and Mr Desmond’s Northern & Shell about the sale to help him to decide whether to allow it to go ahead.
The deal – which has been years in the making – represents a major upheaval in the UK media landscape, bringing the Left-wing Mirror papers and Right-wing Express titles under the same roof. It will also see Trinity take control of a series of celebrity magazines.
Mr Hancock’s concerns include free expression, with the minister saying he had “concerns” about the impact a sale would have on “editorial decision making” and whether editorial independence would be maintained at the Express and Star if they are bought by the publisher of the Mirror titles.
A concentration of ownership of national newspapers was another a worry, with the Culture Secretary pointing out that if the deal goes ahead, then the combined business would hold nine out of 20 titles.
He added: “The merged entity would become the second-largest national newspaper organisation in circulation terms, with a 28pc share of average monthly circulation based on circulation figures for 2017 among national titles, including daily and Sunday titles.”
The CMA has also launched an initial investigation into whether competition will be harmed by the sale.
Mr Hancock added that any decision to intervene would require Ofcom to report to him on the public interest considerations, along with the CMA reporting on jurisdiction.
Trinity Mirror chief executive Simon Fox – who has previously said he is “not in the slightest bit concerned” about a review by competition watchdog – has promised shareholders £20m of cost cuts by 2020 if the deal goes ahead.
The takeover will see the combined business renamed as “Reach” to reflect its size, and Mr Fox has said that “a significant amount” of planned savings from the tie-up will be delivered in the first year following the takeover.
However, the CMA has already barred Trinity from integrating the Express and Star following an order two months ago, and the watchdog has also demanded “no changes are made to key staff”.
Mr Desmond has owned the newspapers since 2000 when he paid £125m after a fierce bidding war.
However, since he took control their revenues have almost halved as print circulation and advertising sales have declined.
Trinity Mirror said: "This is a part of the process that we were aware was possible following our acquisition of the Northern & Shell publishing assets. We continue to believe there are no plurality or competition issues.
"We would expect any review by Ofcom arising from this DCMS statement would happen in parallel with the CMA review, which we expect to conclude by June 7 2018."
Northern & Shell declined to comment.
