Matt Moulding’s online retailer THG bought the loss-making London business paper City AM via a prepack administrative.
City AM’s owners listed the news group for sale in this month. They were looking to either invest or sell after calling it quits with the 17 year old news group.
According to two sources familiar with the situation, the process did not succeed in finding a buyer. The group was acquired by London-listed THG through the administration procedure.
Half of the newspaper is owned by Dutch private investors. The rest is split between Jens Torpe, chief executive, and Lawson Muncaster. FRP Advisory had been hired to provide advice on the sale.
The deal will ensure the future of city AM in London, which currently employs around 40 people.
The acquisition of THG will raise questions about the company’s strategy. Moulding, its founder, has had a combative history with the media over corporate governance, and the strategy for his retail empire.
A person familiar with the process said that although investors may question why City AM would buy a newspaper from a retailer, there is a good fit in terms of philosophy between City AM’s and Moulding’s.
“He is pro UK, pro libertarian like City AM.” “He knows the digital landscape and can take City AM into its second phase with money and investment to take it ahead, and new business verticals”, the person said.
THG, which is known for its beauty, nutrition and health businesses, also has a media division that produces content for both its own customers and third-party brands, including Coca-Cola, Nestle and Coca-Cola, that use the Ingenuity technology platform. The company also publishes two online magazines: The Supplement and The Highlight. Their combined readership is 600,000.
THG will pay the business owners a certain amount of money, but no specifics were provided. Muncaster stated that the deal was “perfect” for the company.
Enders analysts said that City AM, a loss-making publication, would have only yielded “very little” in terms of price due to the challenges facing the freesheet market. Douglas McCabe, an analyst at Enders, said that City AM had a large audience but a limited ecommerce potential, which Moulding might try to exploit.
Moulding’s long-form posts on LinkedIn are well known. He often criticizes what he believes to be unwarranted attacks against his company by City analysts and the press. In a post he made three months ago, Moulding said that “it has sadly become standard for select few in the world of media, bank analysts, and hedge funds to regularly create negative coverage against UK-listed companies, including THG”.
On Wednesday afternoon, he said that City AM would retain “full editorial freedom”.
He added, “We have been reviewing disruptive media opportunities for a long time but waited until the right moment and opportunity.” This deal complements our digital media expertise and successful content creation studios. It helps us reach an enormous new audience.
Moulding said in a LinkedIn posting that using THG’s existing media infrastructure would result in about PS1mn worth of synergies. He argued this would bring City AM back to profitability. “While THG’s main focus is on building reach for ad-tech, City AM will be able to profit from it.” . . It’s a good thing one of the UK’s most influential papers is still owned by UK citizens,” wrote he. There’s a gap in UK business media. One that is supportive and appreciative of UK business and wants to see us improve our global competitiveness.
Prepackage is an agreement whereby the sale of a business is negotiated prior to the appointment the administrator. BDO was responsible for the entire process.
City AM’s monthly readership is between 1.8mn to 2mn online, with over three quarters of them in the UK. Its print circulation is 67,714.
The magazine is available in more than 400 commuter hubs throughout London and the Home Counties, and 1,600 offices located in the City of London and Canary Wharf. It claims a daily audience of over 399,000 professionals. Sky News reported on the discussions with THG.
The newspaper has stopped printing on Fridays after struggling during the pandemic-lockdown.
Media analysts warn that it is becoming increasingly difficult to earn money on the free sheet market due to the decline in print advertising and the pressures placed on circulations.