Trinity Mirror Says Evaluating Some Northern & Shell Assets --Update

(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 [e-mail]; Twitter: @RoryGallivan

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