Mirror Group Newspapers leads consortium that paid about $110 million for the nonpartisan daily and Sunday Independent
CONTROL OF THE Independent, London, which was founded in 1986 to be a nonpartisan voice in British journalism, has been bought by a consortium led by Mirror Group Newspapers Ltd., which publishes the tabloid Daily Mirror, London.
The deal, worth about $110 million, covers the daily Independent and its sister Sunday paper, which was launched in 1990.
The takeover went ahead after Michael Heseltine, secretary of the Department of Trade and Industry, decided not to refer it to the Monopolies and Mergers Commission. In announcing his decision, Heseltine said quick action was needed to save the papers, which he described as "not economic as going concerns."
The consortium, which will control about 66% of the shares, includes two large Independent shareholders: La Repubblica, Rome, and El Pais, Madrid, Spain. The Independent had invited MGN's participation.
In an article in the Independent, editor Andreas Whittam Smith and his deputy Matthew Symonds described the creation of the consortium as "a radical solution" that would involve "an association with a successful British newspaper group to bring us economies of scale and far greater muscle in the marketplace than we could muster on our own."
MGN will be responsible for printing and administration of the Independent, which will move into the Daily Mirror's headquarters at Canary Wharf in London's Docklands.
More than 100 jobs at the Independent are expected to be eliminated, mainly in finance and advertising sales. No job cuts are planned in the newsroom.
MGN, which will own between 25% and 30% of the Independent, has agreed that it will have no editorial authority and that it will have no voice in choosing editors of the two papers.
Heseltine had decided against imposing any conditions on the takeover, such as a guarantee of editorial independence.
Whittam Smith and Symonds wrote that MGN was invited to join a consortium after talks were held with two other newspaper publishing companies. They said MGN's participation offers the prospect of "a comfortable and stable relationship for the long term."
The Independent, they added, was "deeply impressed by the unprompted willingness of the Mirror Group to offer binding guarantees of editorial independence."
A rival bid from Tony O'Reilly, publisher of the Irish Independent, Dublin, Ireland, and chief of Pittsburgh-based Heinz Corp., was not successful.
In the process of seeking control of the two British newspapers, the Irish Independent has become the largest single shareholder in Newspaper Publishing, which owns the titles. In approving the MGN takeover, Heseltine also allowed the Irish company to increase its stake in the Independent from 24.9% to 29.9%.
The takeover by the consortium has been criticized strongly. Opponents have said it contradicts the original ethos of the power in too few hands. There also have been suggestions that David Montgomery, MGN chief executive, cannot be trusted to honor guarantees of editorial freedom.
Montgomery, former editor of the News of the World and Today, two London tabloids owned by Rupert Murdoch, has made large-scale job cuts since he became MGN chief executive in 1992. Critics noted that he fired the editors of the Daily Mirror and London Sunday People after giving assurances of editorial freedom.
Writing in the London Evening Standard, free-lance columinist Craig Brown quoted the complaint by Whittam Smith and Symonds that "rival newspapers have used their news and feature pages to propagandize against us and give space to grudge journalism of the most tedious kind." To which Brown responded, "Ho, ho, ho. What they neglect to mention is that most people who write for the Independent and the Independent on Sunday are extremely suspicious of the deal struck with Mirror Group Newspapers. …