(Bloomberg) -- Trinity Mirror Plc is in talks to buy billionaire Richard Desmond's U.K. tabloids, raising the prospect of the biggest shake-up of the country's newspaper business in more than a decade.
The publisher of Britain's Daily Mirror is in talks to acquire all of Northern & Shell Media Group Ltd.'s publishing assets, according to a statement Friday. Northern & Shell's newspapers include the Daily Express, Sunday Express, Daily Star and Daily Star Sunday.
A deal would mark the biggest takeover in the U.K. newspaper industry since David and Frederick Barclay bought the Daily Telegraph in 2004. A union would allow both companies to combine resources and continue wringing expenses out of their operations, at a time when U.K. newspaper publishers are battling declines in circulation and advertising revenue.
“Such a deal might have significant cost synergies for the enlarged group,” said Alex DeGroote, a media analyst at Cenkos Securities. “Trinity has already been acquisitive in this sector, but clearly feels the need for more scale.”
Shares of Trinity Mirror advanced 0.8 percent to 91.50 pence at 9:18 a.m. in London, valuing the company at 252 million pounds ($331 million). They had declined 14 percent this year through Thursday.
The combination would bring together newspapers with contrasting editorial stances on major issues like Brexit. Under Desmond, the Express has veered in a conservative direction, splashing stories critical of immigration and urging the U.K. to quit the European Union. The Mirror has long supported the left-leaning Labour Party, and it endorsed a vote to remain in the EU in last year's referendum when Britons opted out.
The Mirror's circulation fell 19 percent in July from a year earlier year to about 625,000 copies, according to the Audit Bureau of Circulations. The Express had a circulation of about 381,000 in the same month, down 10 percent from a year earlier.
The U.K.'s best-selling newspaper is the Sun, according to the ABC. The tabloid, owned by Rupert Murdoch's News Corp., had a circulation of about 1.5 million in July.
A takeover by Trinity Mirror would mark Desmond's departure from British newspaper publishing. The billionaire media baron, previously known for publishing pornographic magazines, became a major U.K. newspaper owner in 2000 when he bought the Express group from United News & Media Plc for 125 million pounds. He focused on cutting costs but wasn't able to revive sales of the Express papers. He had more success with the Daily Star, a racier tabloid.
Trinity Mirror had previously been in discussions with Desmond over taking a minority stake in the business, disclosed in January. There is no certainty that an agreement will be reached on a deal, Trinity Mirror said. An acquisition would require the approval of Trinity Mirror's shareholders.
Northern & Shell didn't immediately respond to a request for comment.
To contact the reporter on this story: Joe Mayes in London at jmayes9@bloomberg.net.
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Ville Heiskanen, Kim Robert McLaughlin
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