Online retailer THG in talks to buy City AM

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Matt Moulding’s online retailer THG is in talks to buy London-based business newspaper City AM through a prepack administration.

City AM was put up for sale this month by its owners, who were seeking either an investment or a disposal after calling time on their involvement with the 17-year-old news group.

However, the most likely outcome now was a prepack administration, which would allow London-listed THG to acquire the group, according to two people familiar with the matter.

The newspaper is half owned by two Dutch private investors, with the rest split between chief executive Jens Torpe and managing director Lawson Muncaster. It had hired FRP Advisory to advise on the sale.

The deal would safeguard the future of City AM, which employs about 40 people in London. THG declined to comment.

However, the acquisition would also raise new questions over the strategy of THG, whose founder Moulding has had a combative relationship with the press over corporate governance and strategy at his retail empire.

One person close to the process acknowledged that investors might question why a retailer was buying a newspaper, but said that there was a philosophical fit between City AM and Moulding.

“He is pro-UK, pro-libertarian like City AM. He knows the digital landscape well and can take the paper into its second chapter with investment to take it forward, and money to build new business verticals,” the person said.

He added that THG already had two online publications that had hundreds of thousands of readers. THG is expected to pay some money to the owners for the business even after the administration.

Moulding is known for his long written posts on LinkedIn, sometimes criticising what he has seen as unwarranted attacks on his business by the press and City analysts. In one posted three months ago, he said that “it’s sadly become standard practice for a select few within the world of hedge funds, media and bank analysts to regularly build negative coverage against UK listed companies, including THG”.

THG is interested in City AM “to broaden their reach”, according to a person close to the company, who said that the newspaper could be expected to carry “more THG content”. However, they added that editorial independence would be crucial.

A prepack is an arrangement under which the sale of a company is negotiated with a purchaser prior to the appointment of the administrator. BDO has been lined up to oversee the process, according to the person close to the situation, who cautioned that no deal was yet done.

City AM has a monthly online readership between 1.8mn and 2mn, with more than three-quarters in the UK, and print circulation of 67,714.

It is distributed at more than 400 commuter hubs across London and the home counties, as well as 1,600 offices in the City and Canary Wharf. It claims to have a daily readership of more than 399,000 professionals. Sky News reported the talks with THG and City AM.

The newspaper struggled during the pandemic lockdown given its reliance on commuters and has now stopped printing on Fridays.

Media analysts have warned that the free sheet market has become increasingly difficult to make money given the fall in print advertising, pressure on circulations and difficulty in attracting online readers.

Analysts at Enders said City AM was likely to be lossmaking, which meant that any deal would only have yielded a “very small” price.

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