Guardian Media Group Announces Completion of GBP 619 million Trader Media Disposal

Guardian Media Group plc (GMG), publisher of theguardian.com and the Guardian and Observer newspapers, today announced completion of the disposal of its 50.1% stake in Trader Media Group (Trader Media) to Funds advised by Apax Partners, its joint venture partner, which acquired its previous 49.9% stake in Trader Media from GMG in 2007. Completion of the transaction, first announced in January, follows receipt of regulatory approval.

As a result, GMG has received £619m in cash for its interest. Including dividends and sale-proceeds, GMG will have secured total shareholder returns exceeding £1.4bn from its investment in Trader Media since 2007.

Andrew Miller, chief executive officer of GMG, said: “Completion of this transaction comes at an ideal time for GMG as we adapt to a rapidly-changing marketplace. The sale proceeds will transform our balance sheet, enabling GMG to deliver world-class journalism from a position of financial strength. We are extremely grateful to Apax for their contribution to our joint venture partnership and for the pivotal role they have played in the Auto Trader story.

“Even before the gains from the Trader Media disposal, our underlying business is performing strongly in a volatile media environment. We are forecasting an increase of more than 20 per cent in our 2013/14 digital revenues – up from last year’s £56 million, to around £70 million – and net revenues are expected to have risen for the first time since 2008, up by more than 5 per cent to over £200 million in sales.”

The Scott Trust Limited, the sole shareholder of GMG, welcomed the improving business outlook and reiterated its commitment to use the Trader Media proceeds to safeguard the editorial and financial independence of the Guardian.

Dame Liz Forgan DBE, Chair of the Scott Trust, said: “We can look forward to an era of editorial innovation from the Guardian titles, which are proven pioneers of both journalism and digital distribution. The unique contribution made by the Guardian to national and international debate is now secure for generations to come.”

GMG will issue its full financial results for the 12-months ending March 31, 2014, later this year.

Bank of America Merrill Lynch and Freshfields Bruckhaus Deringer have advised GMG on the transaction.

Media contacts

Guardian Media Group plc
Oliver Rawlins
Group Director of Communications
Guardian Media Group
t: +44 20 3353 3764
e: oliver.rawlins@theguardian.com

Tim Burt
Managing Partner
StockWell
t: +44 20 7240 2486
e: tim.burt@stockwellgroup.com

Apax Partners
Sarah Rajani
Director of Communications
Apax Partners
t: +44 20 7666 6573
e: sarah.rajani@apax.com

Trader Media Group
Adrian Duffield / Kay Larsen
College Hill
t: +44 20 7457 2020
e: adrian.duffield@collegehill.com / kay.larsen@collegehill.com

About The Scott Trust Ltd

The ultimate owner of the Guardian is The Scott Trust, which was originally created as a trust in 1936 to safeguard the title’s journalistic freedom. In 2008 it was replaced by a limited company with the same core purpose of the original trust: to secure the financial and editorial independence of the Guardian in perpetuity, while its subsidiary aims are to champion its principles and to promote freedom of the press in the UK and elsewhere. Other than to cover expense, The Scott Trust takes no dividend from the group’s businesses, whose profits are instead reinvested to sustain journalism that is free from commercial or political interference.

About GMG

Guardian Media Group is wholly owned by The Scott Trust Ltd. GMG’s core business is Guardian News & Media (GNM), publisher of theguardian.com, the third largest English-speaking newspaper website in the world; and the Guardian and The Observer newspapers in the UK. In the financial year ending 31 March 2013, GMG reported the following results:

• Revenue from continuing businesses was £206.8m (2012 £206.3m)
• EBITA from continuing businesses grew to £54.5m (2012 £45.9m)
• Profit before tax improved to £22.7m (2012 (£19.8m) loss)
• Combined cash and investment fund grew to £253.7m (2012 £225.8m)
• GNM revenue was £196.3m (2012 £194.4m)
• GNM digital revenue increased by 28.9% to £55.9m, exceeding the decline in print revenues
• GNM EBITA (£30.9m) loss (2012 £(44.2m) loss), reflecting the success of the continuing five-year transformation plan

Merrill Lynch International

Merrill Lynch International (“Bank of America Merrill Lynch”), a subsidiary of Bank of America Corporation, is acting exclusively for GMG in connection with this transaction and for no one else and will not be responsible to anyone other than GMG for providing the protections afforded to its clients or for providing advice in relation to this transaction.