City AM put up for sale after 17 years

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Free newspaper City AM has been put up for sale by its owners 17 years after launching in the UK capital to serve commuters travelling to the City of London and Canary Wharf. 

City AM co-founder and managing director Lawson Muncaster said that its four owners were looking to either raise a significant investment that would allow the majority of shareholders to exit, or sell the business to a new owner. He declined to give a valuation on the business.

The newspaper is half owned by two Dutch private investors, with a quarter owned each by chief executive Jens Torpe and Muncaster. It has hired FRP Advisory to advise on the fundraising or sale.

City AM is distributed at more than 400 commuter hubs across London and the home counties, as well as 1,600 offices in the City and Canary Wharf. It claims to have a daily readership of more than 399,000 professionals.

City AM said it had an online readership of between 1.8mn and 2mn a month, with more than three-quarters in the UK, and print circulation of 67,714.

The paper was hit hard during the pandemic lockdown, and has since stopped printing on a Friday given that fewer workers now travel to the office. 

City AM is the latest UK newspaper to seek a buyer alongside the Telegraph Media Group, which was pushed into receivership by Lloyds Banking Group last month and put up for sale. 

Muncaster said that the new owners should have a “blank sheet of paper” for the newspaper, which he said came with a loyal audience in both print and online and strong brand equity.

Initial expressions of interest had already emerged, he said, including from European and US media companies seeking a foothold in the London and UK markets. He added that others saw the opportunity to use the newspaper’s reader data, which could open up new revenue streams.

Douglas McCabe, an analyst at Enders, said that City AM was likely to fetch a “very small” price because it was almost certainly a loss making business, but that this would depend on what value a buyer would put on the brand and its readership.

He said: “If a buyer was going to put in money it’s because they believe they can do something with it as a digital brand. Free print media is tough. The pandemic has removed commuting in scale across the City across the five days but Brexit has also affected the paper’s corporate advertising.”

Muncaster said that its existing shareholders were getting older, and the company needed “fresh blood”. He added that he would like to stay with the company as both an executive and shareholder, but that the decision would rest with whoever was picked to acquire the free newspaper and whether they wanted to buy it outright.

“[City AM] needs investment to take it to the next stage,” he said. “As London continues to bounce back from the pandemic, the time has come to think about the next chapter of City AM’s story. As a local paper at the heart of the financial universe, the brand is perfectly positioned to expand into new areas and develop new revenue streams that take advantage of the new media landscape.”