Independent News & Media confirmed today it had entered exclusive talks over the sale of The Independent and Independent on Sunday with London Evening Standard owner Alexander Lebedev.
Following press speculation this morning that the stalled talks between INM and Lebedev were back on, INM said it had agreed to ‘exclusive, in principle – but non-binding’talks with the Russian billionaire over the future ownership of the two London-based titles.
The exclusive talks would run until 15 February, INM said, adding that there was ‘no certainty’that discussions would lead to a sale of the two national newspapers.
INM said: “It should be emphasised that these discussions are still preliminary at this stage and are subject to due diligence, agreement on the financial consequences of the transaction for INM, and a number of substantive contractual conditions being fully satisfied to all parties.
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“As such, there is no certainty that these discussions will lead to the finalisation of a transaction of any kind. The key commercial terms of these discussions are subject to a non-disclosure agreement.”
Lebedev, his son Evgeny, Standard editor Geordie Greig, Independent managing director Simon Kelner and INM chief executive Gavin O’Reilly are believed to be the key figures in establishing a deal.
Sources have told journalists a deal is expected “sooner rather than later” with both sides keen to complete a deal in the coming weeks.
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Negotiations between INM and Lebedev have resumed after the Irish media business last week completed a financial restructuring which saw it conduct a rights issue to raise more than €90m (£80m) from its shareholders. This allowed it to complete the repayment of an outstanding €200m bond and the interest that had accrued.
The initial stage in the repayment plan, a debt-for-equity swap, in effect gave bondholders €122m through providing them with 46 per cent of the company’s shares. Existing investors, some of whom had been calling for the sale of the London papers as part of an alternative refinancing plan, saw their holdings diluted as a result.
The Independent and the Independent on Sunday have been haemorrhaging readers in recent months. According to ABC figures for November, the Independent sold an average of 186,557 copies each day, with 93,231 sold at the full cover price.
The Independent on Sunday sold an average of 156,517 copies each week in November, of which 118,728 were sold at full price.
Lebedev bought 75.1 per cent of the Evening Standard in January from Daily Mail and General Trust, which still retains the remainder of the shares.
At the time of the takeover the Standard was similarly losing paid-for circulation – mainly as a result of the two afternoon freesheets distributed in London at the time.
The Russian former KGB officer removed the paper’s 50p cover price and took the title free in October, boosting its distribution to around 600,000 copies each weekday, more than tripling its readership.
Lebedev’s Standard and the Independent share a number of common factors; they are both read predominately in London and even share an office building after the cash-strapped Independent moved into DMGT‘s Derry Street headquarters earlier this year to reduce costs.
One potential outcome of a sale could see the Independent, which currently cost £1, become a morning free title.
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