In the twilight zone between Micro & Small-Cap today Johnston Press (LON:JPR) shares increased by 72%

(JPR has a market cap of c. £5m – definitely ‘micro’, but an Enterprise value of c. £225m largish ‘mid-cap’)

The company “knows of no operational or corporate or other reason for the price movement.” (Oh, I think they do really - the answer being ‘speculation’)


  • Johnston Press is the publisher of the ‘I’ newspaper and a large number of regional titles.
  • In the last two years they have made adjusted operating profits of £37m & £33m (suggesting to me a rather ‘full’ Enterprise Value.)
  • In 2014 they issued £220m of bonds with a coupon of 8.625% repayable in Jun-19. (There is no clear plan to repay them) - You’ll note that the coupon on these bonds absorb c. 50% of the operating profit.
  • In October 2017 Christian Ager-Hanssen (via his investment vehicle Custos) took a 20% stake in Johnston Press.
  • He claimed (as far as I know without providing evidence) that he would be able to refinance the bonds at a lower rate. The bond market did not seem to share this optimism with the bonds continuing to trade at a substantial discount.
  • On 7-Nov-18 Ager-Hanssen requisitioned an EGM to have him elected to the board. The company rejected the requisition the next day (from memory it was either sent from or to the wrong entity). Inexplicably no corrected requisition was posted. At the time the shares were trading at c. 15p.
  • Over recent weeks and months, the share price had steadily fallen to sub 3p – I believe this to be due to a growing belief that shareholders would be largely “wiped out” by a debt for equity swap to settle the debts (current shareholders I believe would be left owing at best 2-3% of the company ).
  • On Friday however Ager-Hanssen wrote to the board, concerned by rumours (I hadn’t heard them) that the company was preparing for a pre-pack administration and threatening to sue the company in such an event.
  • I presume that to be successful in such a case he would have to demonstrate that the company had failed to take advantage of another option more advantageous to shareholders. (I am not aware what that is).
  • With a bit of a delayed reaction, the share price today rose to close at 6.1p (8.15p…

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