Billionaire Desmond Notches 213% Return From Daily Mirror Owner

(Bloomberg) -- Richard Desmond, the former owner of Britain's Daily Express and Daily Star newspapers, made a 213% return on his money in less than four years from the U.K.'s largest regional news media group.

Desmond sold about an 8% stake in Reach Plc this year for 62.5 million pounds ($86.5 million) through his investment firm Northern & Shell, with the final sale disclosed this month, filings show. The U.K. billionaire received the shares in 2018 from the sale of his publishing assets to the Daily Mirror newspaper's parent company. They were worth about 20 million pounds at the time.

Northern & Shell intended to remain a shareholder, but “following a significant increase in Reach Plc's share price and upon receiving an approach to buy the group's shares in the business, the directors took the strategic decision after the reporting date to sell the group's entire remaining shareholding,” the London-based firm said in its 2020 results, which were released this week.

A Reach spokesperson declined to comment, while a representative for Northern & Shell didn't immediately respond to a request for comment.

The sale means Desmond, 69, no longer holds a major investment in a newspaper owner for the first time in more than two decades, marking a further retreat from the U.K. media industry. After publishing adult magazines, he became a newspaper owner in 2000 when he bought the Express group for 125 million pounds and acquired broadcaster Channel 5 a decade later.

Shares Double

Desmond sold Channel 5 in 2014 for about 450 million pounds. Four years later, he unloaded his publishing assets to Trinity Mirror -- as Reach was then called -- for 126.7 million pounds, including a stake in the company. He was Reach's fourth-largest shareholder at the end of 2020, filings show.

London-based Reach's shares have almost doubled this year as investors have warmed to Chief Executive Officer Jim Mullen's strategy of asking readers to sign up, which lets the firm gather more data on them and improve its digital advertising sales, according to Peel Hunt analyst Malcolm Morgan.

“The print side remains grim, but under the new management team -- despite the impact of Covid -- they're executing a digital strategy that is clearly working,” Morgan said in a phone interview.

Desmond first began unloading his Reach stake in January and reported three further sales, with the last disclosed June 9, according to regulatory filings.

Desmond is now focusing more on real estate and also plans to bid on operating the U.K.'s National Lottery after its current license expires in 2023. Last year, he became entangled in a controversy involving U.K. Housing Secretary Robert Jenrick over approvals for Desmond's redevelopment project in east London.