The floated tie-up between two of the country’s biggest newspaper publishers has been scrapped as the Scotsman’s owner decided against a bid for its larger rival Reach, which owns the Mirror and Express.
National World said the “circumstances are not aligned” on Wednesday, after announcing it was exploring a potential bid for its larger rival three weeks ago.
The deal would have combined two major publishers of local and regional newspapers in the UK.
Reach, formerly known as the Mirror Group, owns more than 130 titles across the UK, many of which it bought from the Guardian over a decade ago.
They include the Liverpool Echo, the Daily Record, the Manchester Evening News, the Star and OK! Magazine, as well as many more local publications.
National World, which owns the Yorkshire Post, said there would have been “considerable industrial and financial advantages to combining the newspaper portfolios of the two companies”, but concluded the circumstances were not right.
“This is despite National World having received in principle financial support from within the investment community to fund a potential deal,” it said.
After press reports earlier this month, National World said it was exploring a potential tie-up between the two publishers. But at that point it had not reached out to the board of Reach – let alone made a bid.
Executive chair David Montgomery said on Wednesday: “A combination with Reach could unlock very significant operational value for both companies, but not all the elements required to ensure a successful transaction were present.
“Rather than create unwanted management distractions for both companies and our respective shareholders, we have decided not to proceed with any discussions at this stage.
“We will focus on pursuing initiatives where we see clear value creation opportunities, primarily relating to content and technology-driven customer initiatives, facing the challenges with which all in the sector must contend.
“National World has ambitious and fully fledged plans to grow our business, creatively and through acquisitions and partnerships. Our key goal is to continue to build a vibrant content business and we will do that.”
Reach has been contacted for comment. Its shares dropped after the news and were trading down 5.6% on the day.