Tindle increases stake in regional rival Johnston Press

Tindle Newspapers has increased its stake in regional newspaper rival Johnston Press to more than 4 per cent and become the company’s fourth biggest shareholder.

A report in The Guardian said Tindle had ‘seized on Johnston’s low share price’and increased its share of the company to 27.9m shares worth £1.39m.

The paper claimed the move ‘reflected the confidence of Tindle chairman and founder Sir Ray Tindle in the durability of the local newspaper market in the face of online competition”.

A “City source” was quoted as saying:

Clearly Tindle think that the share price is low and could bounce back but it is unlikely that the majority shareholder would allow a takeover because its shares were bought at a much higher level.

And whoever takes over Johnston would have to take over quite a substantial debt so it is questionable whether this would be a sensible move anyway.

Tindle’s stake in the company now stands at 4.36 per cent.

Johnston’s biggest shareholder is PanOcean Management, the investment company of Malaysian billionaire Ananda Krishnan, which bought a 20 per cent stake for £43m in 2008.

Other shareholders include Orbis Holdings (10.7 per cent) and Jupiter Asset Management (4.6 per cent).

Last week Johnston announced its financial results for the first six months of 2011, which revealed that group turnover was down 7.5 per cent to £191.8m and advertising was down 10 per cent.

Operating profit fell by 25.7 per cent in the first half of the year to £26.1m while profit before tax was down by almost 50 per cent to £13.8m.

Despite revealing that revenue at one of his newspaper centres was down from £7m to £4m – and two others were down by more than £3m – Tindle owner Sir Ray Tindle has urged his editors to launch their way out of the recession.

In an address to senior management last month Tindle said that while some of its paper were suffering losses the group ‘as a whole is still as solid as a rock” and that its financial figures were “sound”.

He said that ten out of 40 centres were concerned about advertising revenues the remaining 30 were ‘reasonably healthy and still viable”.

In June the company launched a new paid for title in Greater London, the ‘hyper-local’ Chingford Times. Less than a month later it launched another paid-for weekly – the Pembroke and Pembroke Dock Observer.