Johnston Press shortlists three bidders

THREE GROUPS have been shortlisted by British media company Johnston Press to make final bids for its Irish regional newspapers.

It is understood that a group led by accountant John McStay is one of the groups shortlisted for the next round of offers, which must be tabled in three weeks’ time. Mr McStay is a former owner of the Leinster Leader group, which was sold to Johnston Press in 2005 for €138.5 million.

He faces opposition from British businessman Richard Findlay, who headed Scottish Radio Holdings when it invested in a number of Irish regional newspapers and radio stations in the early part of this decade.

Mr Findlay is being advised by AIB Corporate Finance, and is thought to be backed by a UK private equity player.

He was an underbidder for Emap’s Irish radio stations last year and also sought to acquire a handful of local radio stations in the midlands, a deal that fell through.

The third bidder is thought to be a consortium led by retired accountant Joe Hayes, a former managing director of the Kilkenny Peopleand two Tipperary titles before Johnston Press took control of them.

It is understood that this bid is backed by private clients of Goodbody Stockbrokers and is being advised by Eugene Magee, a Gaelic games pundit and former owner of the Longford Leader, one of the titles being sold by Johnston Press.

It is not clear how much the three groups have bid but the titles are not expected to achieve much more than €40 million for Johnston Press. This would be just 16 per cent of what the Scottish media company paid to acquire them in recent years.

This reflects the sharp downturn in advertising revenues in Irish media this year as a result of the recession. Johnston Press’s advertising revenues here declined by 23 per cent in 2008.

Johnston Press owns 13 regional papers in the republic although the Tallaght Echoin Dublin is expected to be sold separately to the other titles.

It is understood that about five bids were received for the entire group. Around a dozen offers were also made for individual titles should Johnston Press decide to sell the newspapers in a piecemeal fashion.

It is understood The Irish Times, Cork-based Thomas Crosbie Holdings and Independent News Media showed no interest in the regional titles.

Johnston Press said recently that it expected the sale of the Irish assets to be concluded by early May.

Johnston Press is keen to offload its Irish titles in a bid to reduce its £477 million debt burden. The troubled listed media company is also reported to be willing to accept offers for two of its flagship British titles, the Scotsmanand the Yorkshire Post.