BHS-inspired pension fears slow Mirror’s Express bid

The fallout from the collapse of BHS is making a tie-up between Trinity Mirror and the Express newspapers harder to get past regulators and pension trustees, say those close to the talks.

Trinity Mirror said today it “continues to make progress” on a £130 million deal to buy the Express and Daily Star papers and OK! magazine.

But pension trustees are worried about a £19 million hole in the Express’s staff pension scheme and an even bigger £400 million deficit at Trinity Mirror.

The collapse of BHS has heightened concern from pension trustees, who fear they may be called to account if they don’t ask tough questions ahead of any merger, Trinity insiders said.

A third-quarter trading update from Trinity today is unlikely to damp fears that the deal with the Express will only increase pressure on the balance sheet. Publishing revenue fell by 9%, with print declining by 10% and digital growing by 4%. Publishing print advertising and circulation fell by 16% and 17%.

Trinity chief executive Simon Fox said: “I don’t take great comfort from these numbers, but I don’t think this changes what is a compelling deal. The logic is unchanged.”

He added: “There has been an improvement in national print advertising, not so in regionals. It is still a super challenging environment.”

Fox’s words may lead to questions from shareholders about whether Trinity is in danger of over-paying. According to reports, Trinity would pay £60 million in cash to Express owner Richard Desmond, and £30 million in shares giving him a 10% stake in the new company. Another £40 million would be paid as cost savings flowed from the deal.

But profits at the Express and Star are falling, down by half to just £13 million in the last year. Turnover fell 10% to £157 million.

Trinity Mirror shares were steady today at 84p, which leaves the company valued at £230 million.