(Adds analyst comments and background)
By Rory Gallivan
LONDON--Trinity Mirror PLC (TNI.LN) is evaluating some of rival
tabloid newspaper publisher Northern & Shell's assets, it said
Tuesday, signalling a possible return of merger and acquisition
activity in the U.K. national newspaper market.
"The board of Trinity Mirror PLC notes the recent media
speculation and confirms that it is at an early stage of evaluating
certain of Northern & Shell's assets," Trinity Mirror said.
"There is no certainty that any agreement will be reached in
respect of the range of outcomes currently under consideration," it
added.
The statement comes after the Times reported that Trinity Mirror
is in talks about buying N&S's Daily Express title.
Such a move would make sense to Trinity Mirror for cost reasons
and to gain greater leverage with advertisers, said analysts at
Liberum. Both Trinity Mirror and N&S have experienced declining
advertising revenue in recent years as growth in online advertising
fails to match print declines.
Although the Express and Trinity's flagship title the Mirror are
both tabloids, they have distinct readerships with the Express on
the right of the political spectrum and the Mirror on the left.
N&S's other titles include the Daily Star newspaper and OK!,
a celebrity magazine. It acquired the Daily Express, Sunday Express
and Daily Star in 2000 for 125 million pounds ($184 million).
Northern & Shell also owned the U.K.'s fifth free television
channel Channel 5 until it sold it to U.S. media giant Viacom Inc
(VIA) last year for GBP454.3 million.
The latest available accounts for N&S show revenue from
publishing activities of GBP257.4 million for the year ended Dec.
31, 2013. Trinity Mirror, which aside from the Mirror also
publishes many local titles, earlier this month reported revenue of
GBP636.3 million for the year ended December 28, 2014.
Although analysts have speculated about possible transactions
such as Pearson PLC (PSON.LN) selling the Financial Times, actual
mergers and acquisition activity in the U.K. national newspaper
market has been thin on the ground in recent years.
There has been some activity in the local newspaper market
though, including the establishment in 2012 of Local World, which
combined the local newspapers previously published by Daily Mail
publisher Daily Mail & General Trust PLC (DMGT.LN) and Illiffe
News & Media. DMGT and Trinity Mirror are both shareholders in
Local World.
Shares at 1107 GMT, up 4 pence, or 2.1%, at 192 pence valuing
Trinity Mirror at GBP497.8 million.
-Write to Rory Gallivan at rory.gallivan@wsj.com; Twitter:
@RoryGallivan
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