28th Oct 2015 08:44
LONDON (Alliance News) - Trinity Mirror PLC on Wednesday said it agreed to acquire the 80% stake in Local World is does not already own for GBP187.4 million, valuing the regional newspaper publisher at GBP220.0 million, and conducted a share placing to back the deal.
Trinity Mirror will acquire the 80% stake from Daily Mail & General Trust PLC, the publisher of the Daily Mail, and from all other shareholders in the company, including the Iliffe Family. The deal will make Trinity Mirror the UK's largest regional news publisher.
Trinity Mirror said it intends to deliver cost synergies of GBP10.0 million to GBP12.0 million by the second full year of ownership of the business, and it expects the deal to be earnings enhancing in the first full year of ownership.
As part of the acquisition, Trinity Mirror completed a share placing to raise around GBP35.4 million to back the deal. It issued 22.4 million shares at 158.00 pence per share. Shares in Trinity Mirror were up 8.7% to 174.42 pence on Wednesday morning. Daily Mail shares were down 0.1% at 738.00p.
The deal also will be backed for Trinity Mirror by a new GBP80.0 million five-year debt facility, with GBP67.3 million from existing cash resources.
"This is a good day for local media. Local World is a business we know and respect and by combining it with Trinity Mirror we will create an organisation of scale, with the talent and financial capacity to invest and adapt to the rapidly changing media landscape. It is a vote of confidence in local press and its future," said Simon Fox, Trinity Mirror's chief executive.
By Sam Unsted; [email protected]; @SamUAtAlliance
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