Ex-Mirror Boss Unveils Newspaper Deal
The finance director of Trinity Mirror is to join the board of a new company that will on Wednesday take the boldest step so far towards consolidating Britain's regional newspaper sector.
I understand that Vijay Vaghela will be among the boardroom line-up of Local World, a new vehicle whose creation has been spearheaded by David Montgomery, the former boss of Mirror Group Newspapers.
An announcement is expected on Wednesday morning depending on the progress of discussions during the course of Tuesday night.
Mr Montgomery will chair the company, which will own Northcliffe, the regionals arm of Daily Mail & General Trust (DMGT), and Iliffe News & Media, a smaller local newspaper group.
Trinity will acquire roughly 20% of Local World but it will not - for the time being - fold its local newspapers into the new venture.
Local World will combine some of Britain's best-known local newspaper titles, including the Bristol Post and the Cambridge News.
In an announcement marking its launch, Mr Montgomery is expected to commit significant resources to investing in journalistic training and digital production in an effort to counter the perception that Local World's business model will be predicated upon cost-cutting.
As well as Mr Montgomery and Mr Vaghela, the other shareholders will also have board representation.
Insiders have told Sky News that Iliffe's parent, Yattendon Group, will be represented by Edward Iliffe and Lisa Gordon; Kevin Beatty will be one of two DMGT nominees; Artefact Group, a company affiliated with Lord Ashcroft, will be represented by Andy Wilson; and Steve Auckland, Northcliffe's chief executive, will hold the same role at Local World.
DMGT is expected to receive £50m in cash and about 40% of Local World, valuing it at about £100m.
Yattendon and Trinity Mirror will hold about 20% each, with the remaining stake split between Artefact, the hedge fund manager Crispin Odey and board members including Mr Montgomery and Mr Auckland.
The deal has been under discussion for several months, and comes in response to growing pressure on local newspaper publishers, which face the twin threat of dwindling circulation and advertising revenues and a readership increasingly migrating to the internet.
Mr Montgomery could not be reached for comment.