1st Oct 2007 07:36
Trinity Mirror PLC01 October 2007 Trinity Mirror concludes disposal process HIGHLIGHTS • Racing Post sold for £170m to FL Partners • Group to retain Midlands and remaining South East titles • Disposal process raises £263m • Net proceeds to be returned to shareholders • Board confident that 2007 performance will be in line with expectations Trinity Mirror plc announces today the sale of its Sports Division and thedecision to retain its assets in the Midlands and remaining assets in the SouthEast. This enables the Group to move forward with a more tightly focussedportfolio of multi-platform media assets and to develop its technology-ledoperating model for the Group as a whole. The Group has agreed to sell its Sports Division, including the UK's premierracing newspaper the Racing Post and the related racing and sports newspapersand websites, for £170 million in cash representing a multiple of 3.4 x 2006revenues and 11.2 x 2006 operating profit. The business is being acquired by Stradbrook Acquisitions Limited, a companyestablished by FL Partners, an Irish investment boutique. His Highness Sheikh Mohammed bin Rashid Al Maktoum, who founded the Racing Posttitle in 1986 was informed of the sale. At his suggestion it has been agreedthat donations totalling £10 million will be made by Trinity Mirror to fourspecified charities connected to the horse racing industry as a condition of thetransfer of a licence to use the Racing Post trademark. As part of the sale, Trinity Mirror and Stradbrook Acquisitions have alsoentered into various long term services agreements including printing,distribution and IT. In December 2006, following a review of all its businesses, the Board concludedthat in order to maximise shareholder value for the medium to long term itshould rationalise its portfolio of titles. The Review identified that theGroup's regional businesses in Scotland, the North of England, and Wales,complemented by its well positioned UK wide digital assets and supported by thestrong cash flows of its national titles, represented the best opportunities forgrowth. As a result it also identified that its regional businesses in the Midlands andLondon and the South East, and the Sports Division were potential candidates fordisposal. The Board subsequently engaged investment banking advisers to procureoffers for the businesses. At the start of this process, the Board considered that these assets would beworth more to other parties than to Trinity Mirror. However, ultimately itbecame clear that offers received for some of the Group's assets did not reflectthe Board's assessment of their true value, their earnings potential or thestrong positions they hold in their particular markets. The Board has therefore decided to retain its business in the Midlands and thetwo remaining businesses in the South East. The Board is clear that thisdecision will deliver greater value to shareholders than a sale in currentmarket conditions. The management of the businesses being retained will focus on opportunities todevelop the portfolio both in print and digital to support the Group's strategyof building a multi-platform media business. These businesses will also nowbenefit from being fully integrated into the Group's new technology-ledoperating model, which will enable them to reduce costs and explore additionalrevenue earning opportunities. The overall disposal programme will raise a total of £263 million from the saleof seven businesses in London and the South East and the Sports Division. TheBoard intends to return to shareholders surplus capital arising from thedisposals, net of related transaction costs and such pension payments as arenecessary. We do not envisage a tax liability on these disposals. The amount, mechanism and timing for returning capital will be confirmed once wehave appropriate clearance from the Pensions' Regulator and agreement of thepension trustees on the amount of contribution towards the funding of thedeficits on the Group's defined benefit pension schemes. These discussions areexpected to be completed by the end of the fourth quarter. As indicated at the time of our Interim announcement in August 2007, the Boardremains confident that our 2007 performance will be in line with expectations. Sly Bailey, Trinity Mirror Chief Executive, commented: "We believe it is nowright to bring our disposal process to a close. The process will enable TrinityMirror to go forward as a more tightly focussed media group, which is nimblerand more able to respond to the opportunities in its markets. It has alsoreleased a significant amount of capital, which we intend to return toshareholders. "Throughout this process we made it clear that we were not prepared to sell ourhigh quality media assets at any price. It is clear to us that offers for thebusinesses we are retaining in the Midlands and the South East did not reflecttheir true value. Conditions in the debt markets have inevitably impacted on thepositions of potential bidders. "We have therefore chosen to retain these businesses and to develop their marketpositions in both print and digital. They will also benefit from our newtechnology-led operating model, which is already having a significant impact onthe profitability and performance of other Group businesses." Trinity Mirror was advised by Rothschild in connection with this process. Further enquiries: Trinity MirrorVijay Vaghela, Group Finance Director 020 7293 3000Nick Fullagar, Director of Corporate Communications 020 7293 3622 MaitlandNeil Bennett 020 7379 5151Tom Siveyer This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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