Barclay talks see Desmond backtrack

Published on Wednesday 1 September 2004 12:03

DAILY Express owner Richard Desmond has changed his plans to seize control of West Ferry, his printing joint venture in London Docklands, after a private meeting with new business partner Sir Frederick Barclay.

Mr Desmond said last week that he was preparing to offer 30 million for the 50 per cent stake in the West Ferry business currently controlled by the Telegraph Group, which in turn is now owned by the Barclay brothers, owners of the Evening News, the Scotsman and Scotland on Sunday.

Mr Desmond planned to exercise a change-in-control clause to assume full ownership the company.

However, after a friendly meeting with Sir Frederick to discuss plans for the company, Mr Desmond said he would continue to run the site, Europe’s biggest newspaper printing plant, with the new owners of the Telegraph group.

In a statement, he said: "In the Barclays we have found like-minded business people with whom we can work.

"This will be a strong partnership between two private companies ensuring the long-term success of the plant."

Following the meeting last week, the two sides also agreed to inject 6m into the employee pension fund, which faces a 30m shortfall. Mr Desmond will remain in place as chairman of the company for the foreseeable future.

West Ferry, which prints several national newspapers including the Guardian and the Financial Times as well as the Express and Telegraph, is also in need of considerable investment to refurbish or replace its outdated plant.

By reaching agreement, Mr Desmond is able to defray some of the costs of that refurbishment, while the Telegraph’s owners are in a strong position to maintain the printing of their paper there after the contract expires in 2009.

Under the joint venture’s terms, Mr Desmond had until September 10 to announce a takeover of the whole of the West Ferry operation.

West Ferry’s value is based on the print contracts, which run until 2009, as well as on the real estate value of the Isle of Dogs site, which is owned by British Waterways.

Last year West Ferry made profits of 7.7m on sales of 78m.

A spokesman for Sir Frederick said: "We are very pleased that the partnership will continue and look forward to working with Richard Desmond and his team."