The Scotsman’s hedge fund managers are said to be looking to sell the newspaper just months after acquiring it along with 200 other titles in a deal that saw Johnston Press put into administration.
A consortium of New York based hedge funds which took charge of Johnston Press last year are said to be consulting advisers over a strategic review which would likely result in the sale of the i newspaper in one deal and the rest of the group in another.
City advisers are understood to have been approached in recent weeks, with an appointment said to be imminent, according to Sky News.
The Scotsman and i, along with titles such as Scotland on Sunday, the Falkirk Herald, Yorkshire Post, Sheffield Star and Sunderland Echo, were put into administration in November and immediately sold to the group’s bondholders.
A new company, JPI Media, emerged from the deal amid speculation – denied at the time – that the owners would be seeking to break up the business. The Daily Mail & General Trust was among those tipped by Daily Business to bid for the ‘i’ paper which JP acquired from the Russian owner of the Evening Standard in 2016 for £24m. It has been a rare success story in the print market, although its circulation in January of nearly 234,000 copies was 9% lower than the same month in 2018.
The consortium includes Goldentree Asset Management, Benefit Street Partners, CarVal and Fidelity, who also injected £35m of new capital into the company to put it on a more sustainable footing. JP’s debt was reduced by more than 60% from £220m to £85m, with extended debt maturity to December 2023.
Nevertheless, it infuriated shareholders including Christen Ager-Hanssen, an entrepreneur who held a 25% stake in the listed Johnston Press. Along with other shareholders he saw his entire investment wiped out.
There was also anger that the Pension Protection Fund lifeboat was effectively forced to take on responsibility for paying the company’s retirement scheme members.
Johnston Press’s stock market value plunged to just £3.5m at the time of the deal from an all-time high of £1.4bn before the financial crisis. JP paid £160m for The Scotsman titles alone in 2005. JPI Media now has around 2,000 staff compared with almost 9,000 at its peak.
Dave King, who stepped up from finance director to replace Ashley Highfield as chief executive a year ago, helped to oversee the emergency sale process.