The owner of the Daily Mail has snapped up the i newspaper for £49.6m, bringing to an end part of a drawn-out sales process by publishing group JPI Media.
The Daily Mail and General Trust (DMGT), which also owns Metro, announced the acquisition in a short statement released today.
“The acquisition of the i is both strategically and financially compelling for DMGT and there is scope for potential synergies in the future, notably from dmg media’s existing infrastructure and in advertising sales,” said DMGT chairman Lord Rothermere.
“The business will benefit from DMGT’s long-term approach and commitment to investing in editorial content. We also see good opportunities to develop inews.co.uk, a growing digital media asset. Financially, the ‘i’ will be a strong cash generator for the group as we continue to invest across the portfolio, both organically and through acquisitions.”
Shares in DMGT dipped a marginal 0.12 per cent following the announcement.
The move ends months of speculation over the bidders for titles belonging to JPI Media, which was formed after a private equity-led rescue deal for Johnston Press last year.
While the i newspaper was considered the crown jewel in JPI’s stable of titles, a number of other newspapers including The Yorkshire Post and The Scotsman are still up for grabs.
Publishing group Reach today said it had pulled out of the race for some of JPI’s titles. However, rival Newsquest is still believed to be interested in a deal.
In a statement posted to DMGT’s website, chief executive Paul Zwillenberg insisted that the group will maintain the editorial independence of the i.
“Its readers value its distinctive style and politically neutral approach and we are committed to maintaining that,” he said.
The takeover comes as part of an ambitious acquisition strategy for the media group, as it looks to boost its position in a tough market for publishers.
Zwillenberg said the firm believed its existing back-office infrastructure could support the ‘i’. It is not clear how many jobs will be cut.
He said the group could also deliver cost savings for printing, production and distribution, though it said these could take some time to come through.
The deal is likely to undergo an investigation by the Competition and Markets Authority to determine whether a merger would have a negative impact on the publishing market.
DMGT said the i may be subject to a so-called hold separate arrangement during the inquiry, meaning it will be run independently from the rest of group until it secures the green light from the regulator.
A similar arrangement occurred after Reach’s takeover of the Daily Express last year. However, one publishing executive told City A.M. earlier this month that this was like “buying a car and then having the keys taken away”.
The i newspaper has retail sales of approximately 170,000 newspapers each weekday and over 190,000 copies of the iweekend each Saturday. Its website attracts roughly 300,000 daily unique users.
Last year, the company generated £11m in operating profit from revenue of £34m.
The National Union of Journalists has previously issued warnings about the takeover bids launched by both Newsquest and Reach for JPI’s titles amid fears about job losses.
The i NUJ chapel, which represents employees at the newspaper, today said it welcomed any investment that “secures the future of high-quality journalism”.
“We welcome assurances that jobs, quality and editorial independence will be safeguarded and look forward to those undertakings being honoured,” it added.