Scotsman talks 'in early stages'

The Scotsman group is the most valuable Johnston Press asset

Scottish businessmen considering a bid to buy The Scotsman newspaper have said discussions are at an early stage.

A source close to the initiative said talks have only been informal, and that speculation about the outcome was premature.

But it was confirmed that the group is interested in buying if the title and its Scotland on Sunday stablemate come on the market.

Owners Johnston Press has denied it planned to offload its assets.

The men considering a bid for the newspapers are understood to be Martin Gilbert, chief executive of Aberdeen Asset Management and chairman of First Group; Ben Thomson, chairman of the Noble Group finance house and of the Reform Scotland think tank; and Mark Shaw, chief executive of Hazeldene Group property developers, who was one of those who backed a legal challenge to the Lloyds TSB's takeover of Halifax Bank of Scotland.

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Johnston Press, which has 200 titles and is based in The Scotsman's Edinburgh offices, faces eleventh hour discussions with its lenders as it reaches a deadline this week on re-scheduling its £450m debt. It is to publish its half-year results this Friday.

The Scotsman group, including Scotland on Sunday and the Edinburgh Evening News, is Johnston's most valuable asset, followed by the Yorkshire Post.

But with advertising having seen a sharp decline and readers abandoning newspapers in favour of free online news, the whole sector is in crisis.

If Johnston is forced to sell The Scotsman group, it faces a major loss on the £160m it paid for it in 2005, with speculation that the consortium values the asset around £40m.

Johnston Group's share price, which has been trading at a low level, has risen substantially during August.