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National World PLC on Wednesday said that it has no intention to make a firm offer for Reach PLC, following recent press speculation about a potential transaction.
National World is a Leeds, England-based national, regional and local multimedia organisation. Reach is a London-based newspaper, magazine and digital publisher, which owns over 130 national and local media brands in the UK.
On November 3, National World announced that it was in the early stages of exploring a possible offer for the entire issued and to be issued share capital of Reach. However, it had not yet approached Reach’s board of directors.
On Wednesday, National World said that following talks with advisers, it had decided that while there are considerable industrial and financial advantages to combining the newspaper portfolios of the two companies, the ‘circumstances are not aligned’ to proceed further.
This was despite receiving principle financial support from within the investment community to fund a potential deal.
The board said it remained confident in the company’s strategic direction and positioning as a ‘proactive consolidator in the sector’, and as a content driven business in its own right.
‘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,’ said Executive Chair David Montgomery.
‘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.’
Reach shares were trading 5.6% lower at 104.30 pence each in London on Wednesday afternoon, while National World shares were flat at 20.00p each.
National World shares were last traded in London on Monday at 20.00 pence each.
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