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Lebedev Gets Two More Weeks On Exclusive Independent Sale Talks

A little public glimpse today of the ongoing negotiations between Independent News & Media and Alexander Lebedev: the billionaire Russian is getting an extension on his exclusive negotiations to buy the Independent and Independent On Sunday newspapers, “to facilitate bringing these discussions to a successful conclusion”, INM told markets.

Talks between Lebedev and INM have been going on and off for almost 12 months, but were only formally announced on December 18 last year, and were due to expire today. Now the exclusive-talks period ends February 26.

There has been a lot of speculation on what could be happening behind the scenes, although to date nothing concrete has been substantiated. Reports have included questions about Lebedev’s liquidity and who else might be getting involved in the action.

In January, Lebedev sold his 25.8 percent stake in Russian airline Aeroflot back to the state, netting around £255 million in the process, although at the time he said he would use the money to invest in Russian business, not international newspapers. Then there were reports that the Sawiris family, which owns mobile networks and other newspaper assets, were also being brought in on the deal.

Another stumbling block is reportedly around INM’s existing obligations. These include a printing deal with Trinity Mirror (LSE: TNI), which would cost more than £15 million to break; as well as pension and redundancy costs, writes the FT.

The jury is still out on how Lebedev’s other UK newspaper asset, London’s Evening Standard, will ultimately fare financially under his ownership. The paper last year bumped up its circulation as it converted to a free distribution model. It now prints 600,000 copies and is being read by 1.37 million people, according to the National Readership Survey.

One Response to “Lebedev Gets Two More Weeks On Exclusive Independent Sale Talks”

  1. TheInterestedParty

    Pre-emptive Strike.

    It has come to light that IN&M’s Board received an unsolicited offer of considerable magnitude for the Independent titles from a British Family last week; indeed, actually before the already fearful staff were sold down the river by Mr.Kelner. As we all know, they were, in effect, ordered to accept grossly unfair and unreasonable cuts to their redundancy packages, or else the doors would close permanently, with no sale of the papers taking place. Surely that in itself is proof enough that many would be losing their positions under Mr.Lebedev’s ownership anyway! Why the %@#* did they not strike??? Staggering.

    However, it may come as some relief to the extremely hardworking and highly regarded teams, unfortunately likely to be quivering under their desks, perhaps also to the industry as a whole, that the offer on the table is so significantly superior to Mr.Lebedev’s that should it not be considered and acted upon by IN&M’s Board, there would no doubt be full blown investigations by the Culture, Media and Sports Select Committee and the Financial Services Authority, at least.

    This is what is known of the offer terms so far:

    £25m in cash. It is understood this could go up to £70m, maybe more if needs be. It is also presumed this will not come in a briefcase as may have been the case during the Cold War.

    All debts would be assumed, including pension deficits and liabilities.

    The Trinity Mirror printing contract would be honoured and expanded upon.

    Major investment injected to grow the titles nationally and internationally.

    Major investment into the editorial teams and beyond.

    The Indy would not become a freesheet, though it is rumoured that there is healthy funding in place (believed circa £25m) to secure the Tfl contract. (That obviously gives some indication of the proposed business model – a mix of free and paid for.)

    No compulsory redundancies for at least 2 to 3 years, with all packages being reversed to 4 weeks pay per year of service. (The word on the street is that there would actually be a hiring drive should this new Interested Party be successful in buying the titles.)

    All staff would get a basic pay increase of 5-10% immediately upon new ownership. (Presumably this would be to compensate the staff for suffering months of moral-battering. Who knows, some may even start enjoying their jobs again.)

    And perhaps most interestingly, the entire operation would apparently be moved to new premises in Central London.

    Even if half of the above is close to being factual, it looks pretty good and certainly worth pondering pre-emptive strike action for, especially before Mr.Lebedev’s exclusive NON-BINDING talks expire; and just in case IN&M and Mr.Kelner have been less than forthcoming with the truth, not treated their staff in the same fashion as they would expect to be treated themselves, and sign away the possibility of a much brighter future without considering anyone else but themselves.

    There’s no harm in finding out what’s really going on, is there?

    I believe it’s in the best interests of the entire British media industry to ensure that the stalwart institution that is The Indy finds it’s rightful new home in the safest pair of hands for the many, not merely the few.

    So, c’mon Folks, get asking!!!

    Where’s your Independent Spirit????