It had been reported that SMG was in talks to sell off its two ITV franchises, with talks going on with Carlton Communications and Granada, as it tries to reduce its £400m debt.
The news of the sell-off comes as SMG announced its interim results, which revealed a fall in profits. Pre-tax profits almost halved, falling to £11.5m from £20m in 2001.
SMG said £4m of the fall in pre-tax profits came as a result of the decline in ITV advertising and reduced network programme commissions. Turnover was also down, falling to £130.7m from £139.7m last time. Earnings before interest, tax, depreciation and amortisation fell to £31.3m from £34.4m. Earnings per share reflected the fall in pre-tax profits and came in at 2.7p, compared with 4.7p last time.
The company said it had received a number of unsolicited approaches to buy its publishing business and is confident that the sale will be completed ahead of the implementation of the new Communications Act in 2003.
One potential buyer, among many, are the Barclay brothers, who own Scotland's other major newspaper, The Scotsman. A merger of The Scotsman and The Herald has been mooted in the past as the two struggle to fight off competition from national dailies.
SMG's publishing division consists of its three regional newspapers, a stable of 11 business-to-business and specialist consumer magazine titles and its online content and advertising business, s1.
Andrew Flanagan, chief executive of SMG, said: " In difficult trading conditions, the group is performing robustly and all our businesses are profitable. We are well prepared for the advertising upturn when it comes. The sale of our publishing division will provide us with the flexibility, both financial and regulatory, to pursue our cross-media strategy, building national positions in the faster growing media sectors."
He added: "With the exception of our newspapers, all of SMG's media assets -- in television, radio, cinema and outdoor -- attract predominantly national advertising as the geographic footprint of these businesses is also national, albeit in the case of television as part of the wider entity, ITV. However, our newspaper business is less attractive to such major advertisers."
The Herald is Scotland's best-selling quality broadsheet newspaper and the UK's biggest regional newspaper, and the Evening Times is Glasgow's only evening newspaper. SMG acquired the titles when it bought Caledonian Publishing in 1996 for £120m.
The other magazines within the publishing division are: Scottish Farmer; The Great Outdoors (TGO); Components in Electronics; Boxing News; Independent Community Pharmacist; Independent Electrical Retailer; The Strad; Double Bassist; Choir and Organ; International Piano; and Classic Record Collector.
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