Sponsors line up for SMG publishing unit

News that the Scottish media firm is planning to sell The Herald stable of newspapers has sparked interest from UK private equity buyers including 3i and Candover.

Scottish Media Group, the Scottish broadcaster and published has announced plans to dispose of its newspaper publishing business, triggering interest from trade and financial buyers alike.

3i has been among the first to express an interest in the business, although it is likely to face competition from trade buyers which include Edinburgh-based Scotsman Publications, owned by the Barclay brothers, Daily Mail & General Trust, Johnston Press, which earlier this year acquired RIM from Candover, Trinity Mirror, Guardian Media Group, Gannett, and Independent News & Media. Further private equity bidders are also expected.

The Independent reports that SMG is seeking offers of £200m for the unit, which has a particularly strong readership in the west of Scotland. In addition to The Herald newspapers, the SMG publishing division comprises a stable of eleven business to business and specialist consumer magazine titles and an online content and advertising business, s1.

SMG had been expected to announce a disposal programme as it seeks to reduce company debt. The choice to sell the publishing division has surprised several analysts who had predicted a sale of the Virgin Radio business.

SMG has appointed Greenhill & Co to oversee the sale. Greenhill recently handled the $2.2bn sale of Burger King to a consortium led by Texas Pacific, the US form. SMG said it hoped to complete the sale by the second quarter of 2003.