Ingersoll Needs Cash: Former U.S. Publisher Is Looking for a Partner to Pump Capital into His European Newspaper Operations

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Ingersoll needs cash

Ralph Ingersoll II, who pulled out of the U.S. newspaper market a year ago, is now looking for a partner to pump capital into his European newspaper operations.

"We have been working for four or five months to try to sift through a variety of proposals to try to expand the capital base of the U.K. company," Ingersoll said, "which one has to do by selling shares in the company."

Since arriving in Britain in 1987, Ingersoll, has acquired the Birmingham Post and Mail and the Coventry Evening Telegraph in England, as well as 50% of the Irish Press Group, publisher of three titles in Dublin. Ingersoll Publications also has established a string of free newspapers in Birmingham.

Ingersoll said that the company plans to sell a minority stake - of "anything up to 49%."

Bernard Bradpiece, managing director of Chase Investment Bank in London, which is advising Ingersoll in its search for capital, expects a deal to be announced around the end of September.

"It's an international gathering," Bradpiece said of prospective purchasers. "We hae interest in investing from Europe and the United States, as well as the U.K."

Ingersoll Publications has already received two offers of a management buyout. One is backed by Sir Gordon Brunton, the company's chairman, and James Plugh, its chief executive. Another offer is backed by Chris Oakley, editor in chief of the Birmingham Post and Mail. This effort includes other senior executives on the paper.

According to the Financial Times, a management buyout is likely to go ahead only if Ingersoll fails in his plan to attract European investment.

Bradpiece would not discuss the value of the company, but he did say that one newspaper report that put it at 130 million pounds (about $218 million) was "substantially" low.

Speculation about possible buyers has focused on Conrad Black, the Canadian owner of London's Daily Telegraph; and Reed and EMAP, two British publishers with regional newspaper interests.

Ingersoll said that partnerships are common in European publishing.

"There's much more of a tradition in the European market of joint ventures and participations than there is in North America," he noted.

Ingersoll said his company's total investment in Britain and Ireland has been 138 million pounds sterling (about $248 million). This includes about $77 million in additional development in Britain and another $15 million in Ireland. Coventry has got a new building. Both Birmingham and Coventry got new presses, and the Irish Press is moving to new premises.

Ingersoll wants to use the new capital to diversify into subscriber-supported media that serve "much more tightly targeted audiences - less general circulation and more focus. There seems to be clear differentiation between the world of information which you need to know, as opposed to the world of information which is interesting to know.

"All my life I have been publishing information which is interesting to know - we hope," he said, "and it's still important. There's still a very important market for general-circulation newspapers, in particular, but I think equally, there is a growing awareness that to have real balance, it would be useful to have skills and investments on the other side as well."

Ingersoll said the company has continued to increase its profitability since 1988. "We're down slightly from last year, but very slightly."

Ingersoll Publications has also established an advertising agency in London to sell space for the entire group, "and they're having a record year, despite the recession."

Ingersoll's past association with risky financing methods in the United States may be causing some wariness about him in Britain. His company's purchase of U.S. newspaper interests during the 1980s was backed by junk bonds issued by Drexel Burnham Lambert, which was discredited and destroyed by its own connection with junk bonds. …