AK’s overseas media expansion hits snag on Tindle buy

KUALA LUMPUR, Aug 28 — Malaysian mogul Ananda Krishnan’s plans to expand his media presence in Britain took a hit this week after Tindle Newspapers increased its existing stake in troubled Johnston Press, which is majority owned by the reclusive tycoon.

Tindle Newspapers, owner of more than 200 weekly newspapers in the United Kingdom, increased its share in rival Johnston Press to 4.36 per cent to become the fourth largest shareholder after seizing on the troubled newspaper publisher’s low share price.

Johnston Press on Thursday reported a 47.5 per cent year-on-year drop in pre-tax profit to GBP13.8 million (RM67.4 million) in the first half, with the publisher cutting 179 staff as advertising revenue fell by 10 per cent, according to The Guardian newspaper.

“Clearly, Tindle think that the share price is low and could bounce back but it is unlikely that the majority shareholder would allow a takeover because its shares were bought at a much higher level,” the British national daily quoted a City source as saying.

“And whoever takes over Johnston would have to take over quite a substantial debt so it is questionable whether this would be a sensible move anyway.”

Ananda (picture) became the largest shareholder in Edinburgh-based Johnston Press in 2008 after spending almost GBP86 million buying 20 per cent of the company, whose stable of titles includes The Scotsman and the Yorkshire Post.

He had spent GBP43 million buying new shares after the publisher announced a GBP212 million emergency rights issue to shore up its battered balance sheet and another GBP43 million buying over half of the Johnston family’s 19.5 per cent stake.

British newspapers reported then that Ananda was planning to bulk up Johnston Press’s online presence to cope with the loss in revenue after advertisers shifted to the Internet away from regional titles.

“Ananda believes local audiences, both in print and online, have considerable value in the current climate,” Johnston Press chief executive Tim Bowdler told The Daily Mail in 2008.

But the world’s 89th richest man, whose interests span telecommunications, media, gaming, property and power, has been unable to turn around the company.

Since he acquired a majority stake in Johnston Press three years ago, its share price has plummeted from GBP1.35 per share to only 5p now.

Ananda had earlier tried to buy Virgin Radio in what appeared to have been a bid to assemble a global media empire but lost out to India’s The Times Group, in what was then the largest Asian media acquisition in Europe.