COMPANY OF THE WEEK

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The Independent Online
Mirror Group shares rose 13.5 per cent to their highest level for a year following an announcement by German company Springer that it might make a bid for the publisher of the Daily Mirror. The company said "very exploratory" takeover talks it held this month with Trinity will be suspended meanwhile.

The company, which has a market value of almost pounds 1bn, has changed strategy in recent years by cutting costs, reducing its reliance on national newspapers -- which it considers volatile -- and increasing investments in television and regional papers.

In March, the company sold its remaining stake in Newspaper Publishing, the owner of the Independent. Mirror shareholders will probably welcome any offer higher than 260 pence per share, analysts said, while Mirror is likely to hold out for a bid closer to 300p per share.

Axel Springer, Europe's biggest newspaper publisher, whose titles include Bild-Zeitung, Germany's largest-circulation tabloid, said last week that Mirror Group is only one of many acquisitions it is considering. The German company is led by August Fischer, a former executive at Murdoch's News Corp., who became Springer chief executive last December and has pledged to expand overseas.

While a bid from the German company would be "extremely sensible, both strategically and financially", according to Paul Richards, an analyst at Panmure Gordon, other publishers would probably be interested.

"Now that it is out in the open, anyone who's vaguely interested -- and that would be anyone in publishing or with the right amount of financial muscle -- will be looking at it quite carefully," Mr Richards said.

In its push overseas, the Hamburg-based Springer has so far set up publishing ventures in Spain, Austria, Hungary and Poland. It has also branched out into broadcasting and electronic media, though it still gets more than three-quarters of sales from newspapers and magazines.

Copyright: IOS & Bloomberg

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