Desmond ‘open to offers’ for papers

Channel 5 owner would consider selling Daily Express, Star or magazines, according to sources – but only for the right price Richard Desmond is willing to entertain offers for the Daily Express, Daily Star or his magazines – but would only be prepared to consider selling for the right price. Last week it emerged that Barclays Capital had approached Desmond asking if he was willing to see if was willing to sell OK! or any of his other magazines – an approach insiders described as a “fishing expedition”. However, BarCap was not simply dismissed – and instead the bank was given the indication that if Desmond would at least listen to any bidders for any part of his printed stable. One friend said “I told him that he wouldn’t have even entertained selling any of the newspapers or magazines a year ago”, but added that, since the £103.5m acquisition of Channel 5 last year, Desmond’s priorities have changed. Desmond is now closely involved in decisions relating to Channel 5, and has long been particularly attached to OK! magazine. Meanwhile sales of both the Express and Star titles are falling – reflecting the downward trend in the sector – even though both have been price promoted heavily. But with News Corp’s takeover of Sky close to sealing regulatory approval, a sale of the Express and Star titles to an existing newspaper owner may be easier to achieve. Any consolidation play would attract a premium bid. Nevertheless, it remains unlikely that Desmond will sell out, not least because his media empire remains profitable with little or no borrowings, and he has no need of money. Prior to the Channel 5 acquisition Desmond had net cash of £41.7m at his wholly owned Northern & Shell network according to the latest set of accounts available. Profits at Desmond’s publishing and printing activities were £11.4m in 2009, down sharply from £30.8m the year before, largely due to the £52m cost of promotional price-cutting at its titles. Richard Desmond bought the Express and Star titles for £125m from Lord Hollick’s United News & Media in 2000, with the aid of a £97m loan. Aggressive cost cutting meant that Desmond has been able to rapidly pay off the debt and generate healthy profits from the tabloids in the years since. Barclays Capital declined to comment. •

Posted by on March 24, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.