INM confirms sale of Indy titles to Alexander Lebedev
Evening Standard-owner Alexander Lebedev has bought the Independent and Independent on Sunday for £1 from Irish publishers Independent News & Media.
Following months of negotiations, INM has been able to announce the deal with the former KGB agent, who will become the fourth owner of the Independent title since its launch in 1986.
In a statement released this afternoon, INM said: “Independent News & Media is pleased to announce the disposal of The Independent and The Independent on Sunday to Independent Print Limited (IPL), a company controlled by the family of Mr Alexander Lebedev.
“As part of the transaction, INM will pay IPL £9.25 million over the next ten months for use within the titles, in exchange for IPL assuming all future trading liabilities and obligations. The disposal is subject to certain conditions, including Irish Competition approval.
“Existing Independent and Independent on Sunday staff will transfer to IPL, who will continue to operate from the current premises in Kensington, London.”
The deal also involves a new commercial agreement between the two groups, which will give INM full access to Independent content.
Gavin O’Reilly, group chief executive officer at INM, said: “This is a most satisfactory and positive outcome for the titles, their staff and for INM’s shareholders. The transaction will be immediately earnings accretive for INM.
“After our successful refinancing in late 2009, this transaction marks an important milestone in the repositioning of our group and will allow INM to focus solely on its market leading, cash generative assets in Ireland, Northern Ireland, South Africa, Australia and New Zealand.
“I wish IPL and the staff every success for the future in continuing the development of these important and influential titles. I believe that the Lebedevs will be progressive and supportive
owners of the Independent titles.”
As a result of the deal, INM confirmed that Independent News & Media UK chief executive Ivan Fallon has stepped down.
The deal follows clearance from The Office of Fair Trading, which concluded that Lebedev’s takeover would not qualify for a competition investigation, as well as an agreement with Trinity Mirror over the papers’ printing contract.
On March 1, Lebedev agreed to honour the Independent printing contract with Trinity Mirror for five years, while INM guaranteed the additional five years of the contract, which would have cost £35 million to get out of.
In a separate five-year deal to secure the sale, Lebedev also agreed to supply articles to other INM newspapers in South Africa and Ireland.
The Russian tycoon has pledged to spend millions on improving the Indy titles, which lose an estimated £10 million a year.
There has been much speculation suggesting that Lebedev will cut the paper’s £1 cover price in a bid to boost sales of the ailing newspapers, or potentially cut its price altogether. However, Lebedev and his son Evgeny reportedly assured Gordon Brown that they would remain paid-for titles when he visited the prime minister recently.
The full transaction of the Indy titles is expected to be completed in May 2010.
In the latest ABC release, for February 2010, the Independent reported a 1.2% period on period fall, taking its total circulation to just under 184,000 copies.
However, the Independent on Sunday managed to record a 1.1% increase in its total, taking it to almost 156,000 copies.