Regulator Puts Onus on Gannett
Tuesday, August 22nd 2000, 12:00 am
By: News On 6
LONDON (AP) â€” A financial watchdog agency has asked a subsidiary of the U.S. media concern Gannett Co. to prove its proposed buyout of a British publishing group would not hurt competition or editorial independence.
The Competition Commission said Tuesday that Gannett UK Ltd. also must show that a takeover of Regional Independent Media Ltd. would not result in excessive job losses.
Gannett has expressed interest in buying Regional Independent Media, one of Britain's last independently owned newspaper groups. The commission asked two other potential bidders for RIM â€” Johnston Press PLC and Guardian Media Group â€” to allay similar concerns about their own buyout proposals.
Candover, the British venture capital firm that owns RIM, has said it wants to issue shares in the company next spring.
The commission said Gannett, Johnston Press and Guardian Media have expressed their interest early so as to clear any potential regulatory hurdles ahead of time.
Offers for RIM would mark another step in the consolidation of Britain's news media.
In November, United News & Media and Carlton Communications announced a merger to create one of Britain's most powerful television companies, but the deal collapsed on regulatory concerns. Last month, Granada Media PLC said it would buy United News & Media's TV production and distribution business for cash and stock worth $2.64 billion.
RIM publishes the Yorkshire Post and other regional papers and magazines in northeastern England. It also prints the Financial Times for distribution in that region.
Candover bought RIM for $540 million in February 1998. Since then, it has increased the company's circulation and trimmed its losses.
Among the issues to be addressed by Gannett, Johnston and Guardian Media are the goals and likely benefits of a buyout; the effects such a deal would have on increased concentration of press ownership; and safeguards against any negative impact a buyout might have on the public interest.
The Competition Commission said the three companies had about two weeks to respond.
None of the companies immediately returned calls seeking comment.
Gannett Co., headquartered in Arlington, Va., publishes 114 daily newspapers in the United States and London, including USA Today. It also operates 22 television stations and owns 200 nondaily publications.
Gannett UK, through its London-based affiliate Newsquest Media Group, is Britain's third-largest publisher in terms of sales, with a daily newspaper circulation of 460,000.
Johnston Press, headquartered in Edinburgh, Scotland, is the country's No. 4 newspaper publisher.
Guardian Media Group publishes The Guardian, a national daily, and The Observer, a Sunday paper.