Biggest bid: Barclay brothers
Three bidders remain in the battle for SMG’s Scottish newspapers: the Barclay brothers, Providence – in a joint bid with Independent News & Media – and Archant.
The Barclays have made the biggest bid – up to £230m – for The Herald, Sunday Herald and Evening Times in Glasgow. SMG has a duty to its shareholders to get the best price.
Des Hudson, SMG’s publishing chief executive, wrote to the Financial Times this week decrying a leader in the paper which had said the Barclays’ bid ought to be blocked.
His letter said: "In deciding to whom we pass on ownership of the titles, we are duty bound to pursue the best interests of our shareholders."
The Barclays, owners of The Scotsman, are said to believe they can escape a competition commission referral by using their Ellerman investment arm as the official bidder, although some sources dismiss this. "It’s like saying, ‘I’ll sign the cheque with my left hand instead of my right’," said one. Scottish industry sources said that if SMG accepts the Barclays’ bid, it could pose problems for them in their television business, such is the level of opposition in Scotland to them getting the papers.
Archant, which owns a wide spread of newspapers in England, including the Eastern Daily Press, is said to believe it can do the cleanest deal. Although it owns a series of free and paid-for weekly titles in Scotland, it would have no problems with competition regulations, but has no experience in running national titles – as the Heralds consider themselves.
The Independent News & Media and Providence offer is a financial rather than a trade bid, since INM would have only 15 per cent of the equity. Both are already engaged in a £1bn buy-out tussle for the Australian Fairfax newspaper group, a much bigger transaction.
The SMG board is thought to be very aware of the passion and intense interest among journalists and politicians that the deal has attracted and wants to balance this with the interests of its shareholders.
lThe Daily Mail has settled a dispute with SMG over the printing of its newspapers in Scotland, which it said were appearing 6mm too narrow. Associated had served a writ and was withholding payment to the tune of £150,000 per month after it noticed in August a discrepancy in the web width on the SMG press. The Scottish company, which had been using its press for the job since the spring, hotly disputed the challenge, saying it was printing within specifications that had been agreed in 1999.
The writ has now been withdrawn and all outstanding monies paid. SMG has started work on modifying its press to allow a variable web width so it can print to Mail specifications , and will now print 900,000 copies per week rather than 600,000.
By Jean Morgan and Ian Reeves