Britain's Department of Trade and Industry (DTI) has referred the planned sale by Independent News & Media of 23 of its British regional newspaper titles to US media group Gannett to the Competition Commission for further investigation.
Independent announced plans to sell its British regional newspaper business to Gannett subsidiary, Newsquest, for €88 million in March as part of a bid to reduce its high debt levels.
It applied to the DTI for consent to transfer 27 titles to Newsquest. Four of the titles do not require such consent, however, as they are not considered newspapers under British law.
The other 23 titles, which are distributed in the greater London area and include publications such as the Islington Gazette, the Westminster Times and the Kilburn Times, have been referred.
Newsquest already publishes more than 300 newspaper titles in Britain, including 17 dailies, 139 paid-for weeklies and 164 free weeklies.
"This is a large deal and I consider that the proposed transfers give rise to potential competition concerns regarding concentration of ownership of newspaper titles that merit further detailed investigation of the transfers as a whole by the Competition Commission before consent could be given," Britain's Competition Minister, Ms Melanie Johnson, said yesterday.
She has asked the Competition Commission to report back by August 19th.
Shares in Independent News & Media were broadly unchanged in Dublin yesterday, closing one cent higher at €1.42 as market sources said that while the referral could result in a delay, it was not expected to threaten the transaction.
Meanwhile, mobile phone services provider, iTouch, in which Independent has a 52 per cent stake, narrowed its losses for the fourth consecutive quarter in the first three months of the year.
ITouch reported a first-quarter loss of €1.2 million before interest, tax, depreciation and amortisation, down from €3 million the previous year.
The company, which announced plans to buy Spanish mobile phone services provider Movilisto in March, said the acquisition was due for completion on June 2nd.
The purchase should accelerate iTouch's move to profitability as well as establishing the group's position in the European market, chairman Mr Ivan Fallon said.
