Britain's fourth-largest regional newspaper group, Johnston Press, has received Competition Authority clearance for its €138.6 million takeover of the Leinster Leader group.
With 24 titles, Johnston becomes one of the largest publishers in Ireland. The company acquired the titles after it purchased the Leinster Leader group, Local Press Ltd and six titles belonging to Scottish Radio Holdings (SRH).
The acquisitions of the Leinster Leader and Local Press Ltd still needs clearance from the Minister for Enterprise, Trade and Employment, Micheál Martin. All media takeovers or mergers require the approval of the Minister and the Competition Authority. In a pre-close trading statement yesterday, Johnston said that of its Irish operations, only the former SRH titles had had the opportunity so far to contribute to the bottom line. The company said its next set of results would "demonstrate another year of progress".
Johnston issued the trading update relating to the second half of the financial year ending December 31st, 2005, ahead of the group's preliminary results announcement scheduled for March 8th, 2006. The company said yesterday like-for-like advertising revenues fell by 6.7 per cent for the five months to November 30th, 2005, with recruitment advertising suffering most. "Newspaper sales revenues continued to grow over the period with increases in cover prices more than offsetting a modest overall decline in circulations," added the statement.
The company also indicated that it may be prepared to make a bid for Northcliffe newspapers, the regional arm of the Daily Mail and General Trust. It said that it would "take an interest" in buying Northcliffe.
Johnston, which owns titles like the Yorkshire Post and Sunderland Echo, said the planned sale of Northcliffe confirmed its "long-held view that ownership changes and consolidation in the sector are likely to continue".
"Whilst we will take an interest in developments, this will only be done in the context of creating value for our shareholders and in the belief that this is unlikely to be the last significant structural change in our industry," the company noted in its statement.
But any merger between Johnston and Northcliffe, which has a likely price tag of £1.5 billion (€2.21 billion), would risk falling foul of competition rules in the UK, as the combined group would have a market share of more than 30 per cent. One of the factors encouraging consolidation in the regional newspaper market is the pressure on advertising revenues.
