Business a.m. in limbo as owneer seeks partner

Bonnier, which launched the paper in September 2000, has said it does not want to go on alone carrying the cost of the business and political title during the current economic downturn in Sweden and the UK.
When the project was originally planned, it was meant to be a joint venture between Mirror Group and Bonnier, but Bonnier went ahead alone when the national newspaper group was sold.
A month ago the company asked merchant bank Lazards to prepare a document for possible trade and financial partners. This was circulated a fortnight later.
Business a.m. has had approaches over the past year from trade publishers and others who wanted to get involved, said managing director John Penman, but at the time Bonnier was not interested.
Now, when it looks imperative for the survival of the paper to find extra cash, the initiative is coming up against the problem that most of the likely buyers are bidding for SMG’s Glasgow-based titles, The Herald, Sunday Herald and Evening Times.
Penman said he expected fairly swift decisions – within the next six weeks. "Either they are interested or they are not," he added.
There may be other solutions that the board is allowing the management to look at. There is speculation that the top team at Business a.m. could launch a management buyout, although Penman refused to comment on this.
It was discovered during the past six months that circulation had grown by only 10 per cent of what the newspaper needed, despite advertising revenue showing an increase of 25 per cent on 2001.
"Circulation was a problem. It would cost more money to break even," said Penman. Last year’s restructure at the paper, when there were 12 redundancies, also took a lot of costs out of the business.
Bonnier will have invested between £20m and £22m by the end of this year and the paper needs another £8m to £10m extra to enable it to develop.
"We are looking for solutions that will keep Business a.m. on the track to profit and at the same time keep signed up to the vision we have had from the beginning," explained Penman. "You don’t get involved in the start-up of a newspaper if you expect to have a quiet, boring time.
"It’s been difficult because these past two years we have been trying to grow the newspaper in economic circumstances that are not very beneficial. But I am delighted at the quality of the paper we produce and we have proved we can sell subscriptions.
"I’m very confident we shall still be here producing the paper," he said.

Jean Morgan

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