Monday, August 11, 2008

BPN 1186 Dutch newspapers are rearranging the landscape again

It is summer time, but the Dutch newspaper publishers PCM and Wegener are talking about rearranging their common assets and about swapping titles. PCM wants to buy the minority share of 37 per cent in AD from Wegener, while Wegener wants to buy the free local newspapers of PCM.

The news that Wegener wants to sell its minority share in AD (the former Het Algemene Dagblad) is surprising. Until 2005 AD was a lost leader within PCM. But AD has picked up and had a circulation of 468.000 copies and was profitable last year. The newspaper merged at that time with the paid regional dailies of PCM and Wegener, leading to a national edition with seven regional editions. In the title PCM owns 63 per cent of the share, while Wegener has a minority of 37 per cent of the share; yet both have an equal say of 50 per cent in the venture. The 37 per cent of shares is valued at 20 million euro. Surprisingly PCM wanted to buy all the shares in 2006, but Wegener kept them, despite the difficult management of a daily newspaper by two newspaper companies, as insiders have indicated.

AD has an illustrious history of editorial items such as the annual green herring test. With a summer of sports events ahead such as the European Soccer Championship, the Tour de France and the Olympic Games it announced a trial of a sport daily. Although the results have been encouraging, a continuation has been called off.

At the same time both companies talk about swapping the free local media of PCM to Wegener. PCM has 27 free local editions with a circulation of 1 million copies in the delta between Amsterdam, Rotterdam and Utrecht. Wegener being a major regional publisher would like to expand its local free newspaper market. In this way ad sales people are able to sell package deals for their local paid media, but also their local free media.

PCM will be able to pay the AD minority share package from the revenues of the sale of ThiemeMeulenhoff to NDC/VBK for which it will receive 170 million euro.

The move by Wegener is unexpected as the new owner of Wegener, Mecom, said last year, that the company was committed to its minority share. But after a year things have changed: a profit demand of 15 to 20 per cent by the holding Mecom and the new management at Wegener. In the background also plays Mecom’s financial state of art and strategy. Presently the company is involved in the sales of its Norwegian daughter Edda Media, the former Orkla Media.

The talks are still in an early stage and are dependent on some conditions such as transaction documentation and the green light of the monopoly watchdog. PCM and Wegener hope to complete the deal before the end of the year.

Blog Posting Number: 1186


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