The Scotsman may change hands

According to media reports a consortium of Scottish businessmen is in talks to buy The Scotsman. The reports say Martin Gilbert, CEO of Aberdeen Asset Management, Edinburgh financier Ben Thomson and property developer Mark Shaw are conducting secret negotiations even as Johnston Press denies plans to sell the newspaper.

But the two sides are reported to be nowhere near reaching an agreement on price with current owners seeking about £40 million for the paper and associated publications, Scotland on Sunday and the Edinburgh Evening News.

Johnston had acquired the paper and its stablemates for £160 million from the Barclay brothers.

The report goes on to say that the consortium is in parallel discussions with Newsquest publisher of the Glasgow-based Herald about a joint venture to pool resources.

The merger of The Scotsman and The Herald groups was originally suggested four year ago by Andrew Neil while running Scotsman Publications for the Barclays, but the idea did not find approval of the Scottish political establishment.

In May, the Johnston group had issued a profit warning of a strong likelihood of breach of banking covenants in case of failure to sell its Irish businesses.
At the time, the company confirmed that it had been approached by an unnamed party for The Scotsman but said there were no plans to sell any titles.

The company has a debt burden of £448 billion compared with its current market capitalisation of just under £200 million and speculation is rife that the group would unveil a refinancing of its debt beyond September 2010. However, no deal has yet been finalised and talks will continue.

Johnston has also denied plans of a rights issue. The company launched a deeply-discounted rights issue in May 2008 when it was close to breaching covenants. The company also sold a 20 per cent stake in the group to Malaysian businessman Usaha Tegas at that time.

NM Rothschild and Cazenove are supposedly advising Johnstone in the refinancing talks.