One of Britain’s oldest regional newspaper groups went on sale while racing to find new investors willing to make up for a financing gap exacerbated by the disastrous impact of the COVID-19 pandemic on advertising revenues across the industry.
Sky News found that Archant, founded in 1845 and publishes titles such as the Eastern Daily Press and London’s Ham & High Express, appointed corporate funders to find new sponsors.
City sources said this weekend that the family business wanted to secure new funds within the next few months.
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KPMG, a professional services company, is handling the process.
Archant is one of the most venerable names in the British print media industry, having been co-founded more than 175 years ago by the Colman family, whose name adorned one of the most important English mustard brands.
Together with the Colmans, the Copeman family continues to own the business, based in Norwich and employs around 1,100 people.
It publishes about 60 newspaper brands and 75 magazine brands that include Airgun World and Tillergraph, a title for canal boat enthusiasts.
The company has 9 million unique monthly visitors to its websites and prints more than 6 million copies of its publications every month.
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Last year, it established a remarkable partnership with Google, the online search giant, to develop a new model of local digital news.
PeterboroughMatters.co.uk was the first website to be launched from this partnership, which is worth about £ 4 million in revenue for Archant.
For Google, Alphabet’s search division, the joint venture partly intended to counter criticism to the extent that Facebook and Facebook eroded ad revenue from traditional local news sources.
The regional publisher has seen a decline in sales in recent years, from £ 96.6 million in 2017 to £ 78.7 million last year, with a further likely drop this year as a result of the coronavirus outbreak.
A plus point was The New European, the national anti-Brexit title launched by Archant just days after the EU referendum as a four-week “pop-up newspaper”, has become an astonishing commercial success and continues to be published.
It sells approximately 20,000 copies a week, with 10,000 subscribers, while its website generates 3.5 million page views per month.
Several private equity groups have been informed of their interest in buying part or all of Archant, according to experts.
It is understood that the group’s shareholders have an open mind about a definitive sale of the business.
Any agreement could be structured as a pre-package management, which would end the interests of existing investors.
David Montgomery, the serial newspaper investor who previously ran the Daily Mirror’s parent company, is likely to be among competitors to buy the company, according to media analysts.
Montgomery has created a new vehicle, National World, to acquire newspapers and other media assets, and it is rumored that he is interested in bidding for The Daily Telegraph.
An obstacle to a deal is likely to come in the form of Archant’s pension deficit, which amounts to tens of millions of pounds.
The funding gap is a legacy of the publisher’s long history and the decades-long decline in print circulation and advertising revenue.
In this and other respects, the disappearance and rebirth of Johnston Press, Archant’s greatest rival and owner of The Scotsman and Yorkshire Post, echoes.
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The pension agency launched an investigation last year as to whether the company had used a pre-package insolvency proceeding to dump £ 300 million into pension liabilities into the Pension Protection Fund.
JPI Media, as it is now known, has temporarily suspended the publication of many of its print titles and has suspended the search for new owners.
Archant has shaken its management in an attempt to improve its financial performance.
Last year, he replaced his chief executive – former ITV executive Jeff Henry – and the chief financial officer, appointing Simon Bax, former chief financial officer at Pixar animation studio, as chief executive.
According to Bax, Archant would have made good progress, although his print titles have been heavily affected by the blockade across the UK, accelerating the need for new financing.
In a statement released to Sky News this weekend, an Archant spokesman said: “The Archant board confirms that it is in initial discussions with several third parties who have expressed an interest in investing in our business.
“For clarity, the company faces no immediate threat to trading and continues business operations as normal.”
Archant, he added, “will not comment further for now.”