By Hamish Mackay
Scottish Media Group’s sale of the Herald group and its publishing division to US media group Gannett has been overwhelmingly approved at a special general meeting in Glasgow.
Speculation that SMG’s board would face a rough ride over its decision “to sell the family silver” proved groundless, and only 114,000 votes were cast against the £216m sale, which halves SMG’s debt pile of £400m.
The sale will now be formalised towards the end of March, with Gannett’s UK subsidiary Newsquest Media taking over in April.
SMG will now concentrate on developing the national advertising aspects of its TV, radio, cinema and outdoor advertising assets.
There has been a dramatic reversal in the fortunes of the Glasgow-based media conglomerate. Two years ago, SMG was enjoying pre-tax profits of £54m and a stock market price-tag of £890m.
Now profits are barely half that level, and shares have collapsed from 285p to a low of 74.5p last week, which values the company at £233m.
At the 90-minute meeting, which was closed to the media, chairman Don Cruickshank strenuously refuted media reports that the Newsquest deal was only worth £170m.
He explained there would be £4m in payments to advisers, and an upfront payment of £10m into the employee pension fund.
However, he emphasised: “That is all – there are no other expenses or liabilities germane to the transaction, and that leaves the price paid well over the £200m we set.”