Private equity firms circle Northcliffe

A mix of private equity and trade buyers are preparing to submit second-round bids for Northcliffe Newspapers, the Daily Mail and General Trust’s regional press business, but the Johnston Press group is said to have ruled out making an independent bid for the division, according to sources close to the company.

Northcliffe, which owns more than 100 titles, reported operating profits of £101.6m last year and is valued by analysts at up to £1.5bn.

Private equity firms CVC and Candover have teamed up to make an offer and are now considered leading contenders in the auction.

The private equity team has hired newspaper executive Chris Oakley to run Northcliffe if the bid succeeds.

Trade buyers are likely to face regulatory issues, although the impact of these could be lessened if competition authorities looked at regional markets separately rather than on a national scale.

According to a report in The Times, it is not clear whether Johnston had tried to join forces with the other bidders, adding that the company had held talks with other interested parties in the hope of buying some of the titles should one of them win the auction.

Other press speculation suggests that US media-focused private equity group Providence is also in the running, as well as US newspaper publisher Gannett.

Gannett is expected to bid for the entire portfolio, despite its ownership of Newsquest, the UK’s second-largest regional newspaper business, with titles including the Braintree & Witham Times and the Herald in Glasgow.

Craig Dubow, chief executive of Gannett, said last year that the company was interested in Northcliffe and remained keen to increase its presence in Britain.

The report went on to say that a number of smaller regional publishers and financial buyers had also lodged expressions of interest with Greenhill, the bank running the sale. If they become involved, it would be as partners for bidders that got into the next round.