Johnston Press and the owner of the Independent newspaper have said they are in “late stage discussions” about a £24 million sale of the “i” newspaper, the cut-price compact version of the daily Independent title.
In a statement to the stock exchange, Edinburgh-registered Johnston Press – whose most recent accounts showed net debt of £184m – said the money to fund the purchase from Yevgeny Lebedev would come from the group’s existing cash resources.
The attraction for Johnston Press, publisher of the Scotsman and Scotland on Sunday, is the addition of a national title to its stable of 200 plus local and regional newspapers.
The sale, which Johnston Press warned was not certain, would value the “i” paper at 4.6 times its unaudited “carve-out” operating profit of £5.2m last year.
Johnston Press said the acquisition of the “i”, which has a daily circulation of 268,000 copies, would give it greater reach geographically and “improve its ability to gain a greater share of the national advertising market”.
If the deal goes ahead it could lead to the loss-making Independent and Independent on Sunday closing as national print titles and becoming a digital only operation, in a move that could lead to major job losses at ESI Media, which also produces the London Evening Standard, which makes around £2m of profits a year.
A spokesman for Johnston Press declined to comment on where the content for the “i” – which currently relies almost entirely on The Independent for its journalism – would come from.
Analysts Peel Hunt have questioned the proposed sale, saying that there were no obvious synergies.
In the year to September 2014, the three Independent titles – The Independent, The Independent on Sunday and the “i” – reported operating losses of £5.9m.
Since the “i” was launched in 2010 with a sale price of 20p (which has since doubled to 40p) its commercial success has cross-subsidised losses at the other Independent titles.
The 30-year-old Independent and its Sunday stablemate have for years had the lowest circulation amongst national newspaper titles. In the eighties, sales of the Indy – as it became known – peaked at over 400,000 a day but now languish at around 56,000.
The most recent circulation data for the Independent on Sunday shows weekly sales of 93,000 copies.
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