MAI merger set to go through

The City was betting last night that the proposed merger between MAI and United News & Media would be passed overwhelmingly, on the eve of the deal's first close today.

Shares in MAI, the nominal takeover target under the merger's structure, closed last night at 411p, about even with the all-shares offer from United at yesterday's price of 644p.

Lord Hollick, MAI's chief executive, last night wound up a series of institutional briefings aimed at convincing a sceptical City of the merits of the proposed merger, which has been characterised as "defensive" by most observers.

"There are no great synergies to be had here," said one analyst. "But in the absence of any other bid, it will go through."

Hopes that another media company would enter the fray have faded, particularly since last week's dramatic statement from Carlton Communications, Michael Green's TV and video services company, that it would not intervene.

The combined companies, which will have extensive television, magazine and newspaper interests, are expected to post pre-tax profits next year of between pounds 290m and pounds 340m, acccording to analysts. The unusually broad range of forecasts is a reflection of City doubts about the advantages of the merger. Last year, there were pro-forma operating profits of about pounds 265m.

Analysts at Hoare Govett are among the more optimistic about the proposed merger, which would group MAI's two television licences, Anglia Television and Meridian, along with United's Daily Express, the Sunday Express, the Star and magazines and regional newspapers.

They point to Lord Hollick's track record at building profits at MAI, and assume his role as chief executive of the merged companies will bring improvements to United's range of businesses. The chairman of the new company will be Lord Stevens of United.

But other analysts question whether the combination of television and newspapers will generate any additional value. "This is really about backing management rather than analysing value," Louise Barton, analyst at Henderson Crosthwaite, said. "We are recommending the merger, but don't see any great synergies." She is also concerned about the likely losses the group will clock up following the launch of the new Channel 5 service, in which MAI has a 30 per cent stake.

The merger marks the first attempt to marry independent television and national newspapers, following the tabling of the new Broadcasting Bill. Anlaysts expect further activity in the sector.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...

Reach Volunteering: Trustees with Finance, Fundraising and IT skills

Voluntary and unpaid, reasonable expenses reimbursable: Reach Volunteering: St...

Day In a Page

Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent
Markus Persson: If being that rich is so bad, why not just give it all away?

That's a bit rich

The billionaire inventor of computer game Minecraft says he is bored, lonely and isolated by his vast wealth. If it’s that bad, says Simon Kelner, why not just give it all away?
Euro 2016: Chris Coleman on course to end half a century of hurt for Wales

Coleman on course to end half a century of hurt for Wales

Wales last qualified for major tournament in 1958 but after several near misses the current crop can book place at Euro 2016 and end all the indifference
Rugby World Cup 2015: The tournament's forgotten XV

Forgotten XV of the rugby World Cup

Now the squads are out, Chris Hewett picks a side of stars who missed the cut
A groundbreaking study of 'Britain's Atlantis' long buried at the bottom of the North Sea could revolutionise how we see our prehistoric past

Britain's Atlantis

Scientific study beneath North Sea could revolutionise how we see the past
The Queen has 'done and said nothing that anybody will remember,' says Starkey

The Queen has 'done and said nothing that anybody will remember'

David Starkey's assessment
Oliver Sacks said his life has been 'an enormous privilege and adventure'

'An enormous privilege and adventure'

Oliver Sacks writing about his life
'Gibraltar is British, and it is going to stay British forever'

'Gibraltar is British, and it is going to stay British forever'

The Rock's Chief Minister hits back at Spanish government's 'lies'
Britain is still addicted to 'dirty coal'

Britain still addicted to 'dirty' coal

Biggest energy suppliers are more dependent on fossil fuel than a decade ago
Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition

Orthorexia nervosa

How becoming obsessed with healthy eating can lead to malnutrition
Lady Chatterley is not obscene, says TV director

Lady Chatterley’s Lover

Director Jed Mercurio on why DH Lawrence's novel 'is not an obscene story'
Farmers in tropical forests are training ants to kill off bigger pests

Set a pest to catch a pest

Farmers in tropical forests are training ants to kill off bigger pests