The owner of the Scotsman and Yorkshire Post has revealed it is plotting a surprise takeover of much larger rival Reach, the parent company of the Mirror and Express titles and hundreds of regional newspapers including the Manchester Evening News.
National World, which is listed on the London Stock Exchange and run by the former boss of the Mirror newspaper group David Montgomery, has said that it is in the early stages of a potential offer for Reach.
Montgomery has long coveted a takeover of Reach, to which he sold his former newspaper business Local World in 2015 for £220m. Reach has seen its market value slump by two-thirds to £330m over the past year.
“National World confirms that it is at the early stages of exploring a possible offer for the entire issued and to be issued share capital of Reach,” said National World, which has a market value of just £50m. “National World has not yet approached the board of directors of Reach with regard to the possible offer.”
When Reach, formerly known as Trinity Mirror, acquired Richard Desmond’s Northern & Shell newspaper and magazine assets for £200m in 2018, Montgomery was cut out of talks regarding a potential joint takeover.
Montgomery set up the publicly listed National World a year later as a vehicle to drive consolidation in the ailing UK regional newspaper sector.
In 2020, he sealed a deal to buy JPI Media, the owner of dozens of major local papers including the Edinburgh Evening News, the Lancashire Post, the Sheffield Star and the Sunderland Echo, for just £10m.
Earlier this year, National World failed in a bid to buy Archant, the regional magazine and newspaper publisher that owns titles including Eastern Daily Press and London’s Ham & High Express. Archant was instead acquired by Newsquest, the UK’s second biggest regional publisher.
The potential takeover comes as newspaper publishers struggle with a downturn in digital advertising, soaring print costs and calls from staff for improved conditions as the cost of living crisis mounts.
More than 1,000 journalists at Reach went on strike for one day on 31 August over pay. More days of strike action, as well as a “work to rule” order, were averted when unions accepted a revised pay offer.
On Wednesday, the Independent put more than a fifth of its staff at risk of redundancy as a decline in the digital ad market and wider worsening economic conditions forced the online-only publisher to seek to cut costs.
A Reach spokesperson said: “The board of Reach notes the announcement by National World that it is considering a possible offer for the entire issued and to be issued share capital of the company. The board of Reach confirms that it has not received an approach from National World.”
