£50m deal for Sport Newspapers

Published on Thursday 9 August 2007 00:46

SPORT Newspapers, which produces the Daily and Sunday Sport and is 50 per cent owned by co-founder David Sullivan, has agreed to a takeover deal worth around £50 million with Interactive World.

The reverse takeover deal with Interactive, which supplies adult content to mobile phone users through the internet, will see Sport Newspapers become a public company via a listing on the Alternative Investment Market.

The two companies already have close ties, as Sullivan owns a 49.95 per cent stake in Interactive, although he has agreed to offload his interest for 14.5m as part of the deal.

The deal, which is subject to approval by Interactive shareholders, will enable the enlarged company - Sport Media Group - to exploit the growing relationship between print and digital media.

Andrew Fickling, managing director of both the Daily and Sunday Sport, said a strengthened relationship with Interactive was a "natural choice", enabling the group to grow in the online and mobile content markets and "greatly improve" its offering to readers.

Sport Newspapers was set up in 1986 by Sullivan and David and Ralph Gold, owners of the high street sex shop chain Ann Summers, who both hold 25 per cent stakes in the company.

Its titles have suffered from falling circulation over the last few years, which the firm believes comes from a lack of solid editorial. Its titles currently represent around 1.6 per cent of the "red top" tabloid market.

Sport Newspapers reported pre-tax profits of 2.8m for the nine months to May 31 on turnover of 19.6m. Interactive World posted pre-tax profits of 4.3m in the year to 31 July, 2006. It has 11 staff.