The Daily Mail & General Trust had appointed accountancy firm Ernst & Young to value its regional newspaper arm Northcliffe Media ahead of potential sale, according to a report in The Daily Telegraph.
The paper claimed that the results of Ernst & Young’s ‘vendor due diligence” review show the value of Northcliffe has fallen from £1.5bn to £150m in less than five years.
The Telegraph also reports that in 2005 DMGT pulled out out of a planned sale of Northcliffe because bids failed to match its then £1.5bn valuation.
The report said:
Earlier this year DMGT hired a new management team to run Northcliffe and sources suggest that progress has been made in improving the business.
However, the company faces a difficult environment and DMGT could decide to bundle together smaller groups of papers and sell them off separately.
Yesterday DMGT announced that its operating profit fell 37 per cent in the last financial year, and revenue was down 10 per cent to £236m.