An offer of between £140m and £150m was made for the whole of the Johnston Press group in the weeks before it was sold to JPIMedia in a pre-pack administration deal.
In its first report to creditors, Johnston’s administrator Alix Partners revealed that a total of six offers were received for the publisher after it was put up for sale last month.
While the report did not disclose the identities of the bidders, Alix Partners said that alongside the offer for the entire group, there was a separate bid made of between £96m and £120m excluding the i newspaper, while the i as a standalone entity received two separate offers; one for £25m and one for £35m. One of these is thought to have been made by Daily Mail owner DMGT.
Additionally, a £2.5m offer was made for the Sheffield Star, Sheffield Telegraph and Doncaster Free Press while another bid of £30,000 was tabled for the Observer series and West Sussex Gazette.
While Johnston’s directors consulted with Alix Partners and financial advisor Rothschild on the deals, it “considered that none of the offers received, or any combination of them, would result in aggregate net proceeds sufficient to enable the group to repay the bonds in full”.
Instead the pre-pack sale to JPIMedia, a newly formed company controlled by a consortium of Johnston’s debt investors and led by US hedge fund GoldenTree Asset Management, took place just over a week ago.
The sale process of the business had kicked off last month following a strategic review initiated by Johnston last year to find a solution to the repayment of £220m in high-yield bonds, which were set to mature in June 2019.
Alix Partners said it was satisfied that the marketing process for the sale of the business and assets was “appropriate and well publicised”.
A spokesperson for the administrator said the firm was confident that the pre-pack sale was consistent with independent valuations carried out by Mazars and “far in excess of other offers received”, adding the deal mitigated disruption to the business, preserved jobs and achieved “the best available outcome for creditors”.
The administrator’s report stated, however, that while funds would be available for distribution to secured bondholders, there will be “a significant shortfall to creditors”.
Meanwhile, the Pension Protection Fund (PPF) told Hold The Front Page that it will lodge a claim of £305m with Johnston’s administrators, a figure it has calculated as the cost of continuing to secure the benefits of the company’s pension scheme members at their current level.
A Johnston Press spokesperson told the publication: “Johnston Press has been in regular dialogue with its pension scheme trustees, the Pension Regulator and the PPF since 2014. Throughout our extensive and detailed discussions during the strategic review we have kept them informed every step of the way.
“Up until the administration the company met all its obligations to the scheme, with more than £55m paid in relation to the plan from the beginning of 2014.”