Advisers to the Leinster Leader group have contacted a number of newspaper and private equity companies in their efforts to drum up interest in the provincial newspaper publisher which was put on the market on Thursday.
But with an information memorandum already in circulation, some provincial media sources are already questioning a valuation on the company of €100 million that has been mooted by sources close to its board.
The Leinster Leader Group had pretax profits of €2.07 million in the year to August 31st last on sales of €26 million. The beneficiaries of a sale would include its chairman, accountant John McStay.
The sale of the Leinster Leader is seen as signalling the start of a second wave of consolidation in the sector after the buy-out over several years of many family-owned provincial papers.
The Irish titles owned by Scottish Radio Holdings may be put on the market in the coming weeks. British media group Emap, which is considering a second bid for the company, is unlikely to retain the Irish papers.
But even though the Leinster Leader Group has completed a major investment in a new printing press in Limerick, some industry players believe it would be very difficult to justify a price that was any way in excess of €1 million per thousand papers sold every week.
After the addition this week of the Tallaght Echo to the stable, the Leinster Leader titles have a combined weekly circulation of some 90,000. At €1 million per thousand, the group would be worth €90 million on that basis.
This contrasts with a sum of €60-€70 million that was suggested earlier by sources among the groups who may yet bid for the Naas-based company.
However, Leinster Leader's advisers in PricewaterhouseCoopers (PwC) are also known to be contacting British-based private equity groups, who have not previously invested in provincial media in the Republic. This factor could drive the price up.
Shareholders on the board include: deputy chairman and solicitor Anthony Collins, accountant Iain Stewart, newspaper editor Edward Fennelly, and account Derry Quinn.
Major shareholders not on the board include: Elizabeth O'Kelly of Leixlip, Hester Smallbridge of Oxford, William James Ralph of Tullamore, and Howard Reid of Millisle, Co Down.
