Biggest Mirror investor tells Monty to quit

Click to follow
The Independent Online
PHILLIPS & DREW, Mirror Group's largest shareholder, is expected to tell David Montgomery today that it will back calls for an extraordinary shareholders' meeting to force him out if he refuses to resign at tomorrow's meeting of the board of the newspaper group.

Attempts over the weekend by the embattled Mirror Group chief executive's camp to turn the tables on Sir Victor Blank - by pinning the blame for the boardroom rift on backdoor manoeuvrings by the chairman - appeared yesterday to have merely reinforced the view that the board is bitterly divided and will remain so as long as Mr Montgomery stays at the helm.

Another key investor, Hermes, which met Mr Montgomery on Friday, has told other shareholders that it has already signed a motion requisitioning an emergency meeting to press for his removal. Prudential is also said to be deeply unhappy at Mr Montgomery and backing calls from him to go.

"He would have to pull something out of the hat to save himself," said one adviser yesterday. "The problem is that this is what this business is about - him rather than what is best for the company."

Investors are angry that Mr Montgomery has opposed a merger with the regional newspaper group Trinity, which they believe offers a serious possibility of improving returns, because he would be sidelined by the deal.

Mr Montgomery has belatedly sought to heal the rift with Mirror's main shareholders by suggesting that he would be ready to back the merger provided Trinity upped the price - even though he alleges Sir Victor negotiated the deal behind his back, primarily because the Mirror chairman wanted the top job for himself.

However, the reaction ahead of today's meeting pointed, if anything, to a widening of the divisions within the group.

References in the Sunday newspapers to a dossier to be presented at tomorrow's board meeting by Mr Montgomery, detailing alleged "secret" meetings between Sir Victor and potential bidders, came despite strict orders from Sir Victor on a blanket ban on talking to the Press.

The fact that several of the key executives are prepared to back Mr Montgomery against the chairman has only strengthened shareholders' belief that the boardroom is irretrievably split and cannot be reunited while Mr Montgomery remains in his post.

"An EGM is the nuclear option," said another well-placed observer. "However, P&D would have to back the non-executives, if only from a point of view of corporate governance."