KM Group withdraws KRNM paper bid

The KM Group, Kent’s largest newspaper publisher, has withdrawn its bid to buy several of its rival titles.

Birmingham and Beyond reported the bid back in July, when Founding Editor Alan W Collins argued that allowing the bid may be the only way to save the papers, currently owned by Kent Regional News and Media, a Daily Mail and General Trust subsidiary, and, thus, the journalists’ jobs.

However, the KM Group, who own several local titles across Kent, including the twice-weekly Medway Messenger; the Kent Online news website; and the KMFM radio station, announced yesterday that they had withdrawn their bid after the Office of Fair Trading referred it to the Competition Commission.

The Competition Commission review would have been a costly avenue for the KM Group to pursue, and they made clear when they submitted their bid that if such a review were ordered, they would be forced to withdraw.

Geraldine Allinson, the KM Group Chairman, said “We have invested a huge amount of time on this project over the last few months.

“The costs and time required for a full Competition Commission review would be completely unreasonable for a business of our size and for a deal of this scale.

“The acquisition would have been a good opportunity for our business. However, we have a long list of other developments already in process and we intend to continue to build on our unique blend of multi-media services for the people of Kent.”

Former Managing Director Graham Mead added “We understand this is the first time the OFT has reviewed a case since the change in guidance.

“While the teams at the OFT and OFCOM were positive and supportive, almost without exception, there were some painful moments.

“From a personal perspective, it feels that the process is set up for large, corporate deals, not small transactions involving businesses of our size. The time and effort required appeared to be completely disproportionate to the transaction involved.

“Also, while we fully appreciate that the OFT team have to work to a strict framework, I don’t think that framework is at all relevant to the current state of our industry.

“Nor does it in any way reflect the broader Government view on helping UK business by removing hurdles and giving it an opportunity to grow.”

The Office of Fair Trading’s Chief Economist, Amelia Fletcher, said when announcing the referral “Local newspapers face significant challenges, including falling readership and increased competition from other media, most notably, the Internet.

“However, this merger would create a monopoly in local weekly newspapers in several local areas across East Kent. UK merger law requires the OFT to be cautious in its “first phase” review of mergers. We require compelling evidence to dismiss concerns that the combination of such close competitors as these might result in substantially higher prices or less choice for advertisers and readers.

“The evidence in this case did not permit us to clear this transaction; therefore we think it is appropriate that the merger is referred to the Competition Commission for a more detailed “second phase” review.”

It is unclear how Kent Regional News and Media will proceed following the withdrawal of the bid. Its sister groups across the UK have been selling off titles in a bid to restructure the business and remain profitable.

Medway is currently served by the twice-weekly Medway Messenger, the weekly News (KRNM), the weekly Yourmedway (Archant KOS Media, online only) and one-year-old independent The Medway Broadside.