Friday 8 July 2011

registration by an unidentified party of the name 'Sun on Sunday' this week along with the domain name

-U.K. newspaper publishing groups Trinity Mirror PLC (TNI.LN) and Daily Mail & General Trust PLC (DMGT.LN) are expected to benefit from the closure of the U.K.'s biggest selling newspaper, News of the World, as readers look for an alternative Sunday newspaper, media analysts said Friday.

Trinity Mirror's Sunday Mirror and People tabloid newspapers are expected to be the biggest beneficiaries as they compete directly against News Corp.'s (NWS) News of the World in the tabloid segment of the market, according to UBS analyst Alastair Reid.

Daily Mail & General Trust's The Mail on Sunday newspaper "will also benefit in our view, but to a lesser degree given its mid-market position," Reid added.

The News of the World tabloid newspaper had an advertising market share of 18.3% in 2010, according to Numis analysts, who also believe "the main beneficiaries" of the papers closure will be the Mail on Sunday which currently holds a 31.5% share, Trinity's Sunday Mirror with 14.7% and People with 9.1%.

Trinity Mirror and DMGT shares both rose Friday morning on the back of those expectations. At 0822 GMT, Trinity Mirror shares were up 11% at 48 pence, valuing the company at GBP137 million. DMGT shares were up 2.5% at 485 pence, giving it a market capitalization of GBP1.91 billion.

News Corp. said Thursday that it would close its News of the World newspaper following mounting allegations it intercepted voice mails of celebrities, murdered girls and terrorist victims in its pursuit of scoops. James Murdoch, News Corp.'s deputy chief operating officer, said Thursday that News Corp. had decided to close the 168-year-old Sunday tabloid because the allegations -- if true -- were "inhuman" and had no place in the company.

News of the World is the U.K.'s best-selling Sunday paper, with an average circulation of 3.7 million, according to analysis firm TGI Kantar Media UK. It is one of News Corp.'s four major U.K. newspaper titles, the others being the Sun, the Times and the Sunday Times.

News Corp. also owns Dow Jones & Co., publisher of this newswire and The Wall Street Journal

Daily Mail and Trinity Mirror weren't immediately available to comment.

A News International spokeswoman declined to comment on speculation that it would either start publishing the Sun newspaper on Sunday as a replacement for News of the World or set up a new Sunday tabloid. She also declined to comment on the registration by an unidentified party of the name 'Sun on Sunday' this week along with the domain name