Independent News & Media will find out this week if its £275 million sterling (£350 million) bid for the Belfast Telegraph has been successful, when the board of Trinity Mirror nominates its preferred buyer for the profitable Belfast daily paper.
Industry sources believe the field for the Telegraph has now narrowed to three: Independent, US media group Gannett and British venture capital group 3i. A bid from Guardian Media, an Apax-backed management buyout and an asset-swap proposal from Regional Independent Media are understood to be too low or too complicated to become the preferred option. While Independent and Gannett have always been contenders, 3i has emerged in the past week as a serious dark horse for the Telegraph and has lodged a bid of about £260 million.
The board's nomination this week will allow the British regulatory authorities to decide on the buyer's acceptability before a formal purchase contract is entered into.
While the cash on offer will be the main factor in Trinity Mirror's decision, the British group will also consider other factors, such as the wishes of the Telegraph's predominantly unionist readership.
Competition factors will also be taken into account, but neither Independent, Gannett nor 3i has any significant media business in Northern Ireland, although Independent has been portrayed in the British financial media as having a dominant position in the Northern Ireland market.
Indeed, the Sunday Telegraph referred this week to "Independent's extensive newspaper interests in Northern Ireland", which might trigger a Competition Commission inquiry even though Independent owns only the Northern edition of Sunday World.
These efforts to portray Independent - incorrectly - as a dominant player are understood to have infuriated the group's management, although such reports are unlikely ultimately to influence any deliberations by the Office of Fair Trading. More problematic for Independent is the opposition of Ulster Unionist MPs in Westminster, despite the group's promise of an editorial board that will maintain the Telegraph's moderate unionist ethos and the appointment of several unionist luminaries to the managing company. It remains to be seen whether Trinity Mirror believes the opposition of Unionist MPs is too much of a complicating factor, even though Independent is thought to have made the highest cash bid.
Gannett and 3i may have offered less, but their bids have not been publicly opposed by Ulster Unionist MPs, one of whom, Mr John Taylor, is a significant newspaper proprietor in his own right, owning the third-biggest chain of local titles in the North.
But the Telegraph is a prize worth fighting for, with its monopoly of the afternoon/evening market and its huge classified advertising income. Although circulation has slipped from 140,000 to 130,000, the newspaper still delivered profits of £20 million in the past year, with about £4 million from contract printing activities.
The Telegraph prints several News International titles in Ireland, so it remains to be seen if its contract printing profits can be maintained when News International completes its plans for a print plant near Drogheda. Further printing capacity is due to become available over the next 18 months, with both Independent and The Irish Times planning state-of-the-art print plants for Dublin.
