SMG reopens sale after Gannett tries to cut Herald price
LONDON - Scottish Media Group is reported to have restarted talks about the sale of the Herald group of newspapers, after US firm Gannett tried to renegotiate its £215m deal, fearing it was paying too much.
According to a report in Business a.m., SMG executives have met with the private equity backer of Independent News & Media, Sir Anthony O'Reilly's group that was second in the running for the titles.
However, sources at SMG have sought to play down rumours that its deal with USA Today publisher Gannett, which owns local newspaper publisher Newsquest in the UK, is on the rocks. Gannett had a period of exclusivity, but this expired at midnight last Tuesday.
Gannett is reportedly concerned over reports that sales for the fourth quarter at the Glasgow newspapers -- the Herald, the Sunday Herald and the Evening Times -- will fall short of forecasts. It is said to have reduced its offer for the Glasgow papers to £203m and that this has been rejected. Independent News & Media is thought to have bid £210m, but refused to go any higher.
The Competition Commission is already looking at the Gannett deal, to determine whether it will be in the public interest and if the sale will reduce competition in any of Gannett's existing markets.
Apart from the Independent News & Media bid, the only other bid that had still been in the race was from the Barclay brothers, who own Edinburgh-based rivals The Scotsman and Scotland On Sunday. They had been offering the most money, £225m, but SMG decided not to accept the offer for fear it would run into competition problems.
SMG needs to sell the titles as it deals with £400m worth of debt.
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