Mirror dismissed the bid, in the form of cash and shares, as not offering its shareholders a sufficient premium to reflect a change of control of the company. The decision received a boost when Phillips & Drew, the fund manager that has a 23 per cent stake in the company and has previously indicated its sympathy for Trinity's offer, supported the board's stance.
Trinity decided to press ahead and announce its offer yesterday after talks between the two companies broke down at the weekend. Earlier this year Trinity and Mirror called off talks about a merger between the two after opposition from David Montgomery, the former Mirror chief executive who stepped down in January.
Philip Graf, the group's chief executive, insisted the company was not making a hostile bid. However, he withdrew an earlier offer to Sir Victor Blank, Mirror's chairman, to take over as chairman of the combined group. Mr Graf said he still wanted to make John Alwood, Mirror's new chief executive, deputy chief executive of the new company.
Mr Graf said he was "surprised" at the speed of Mirror's response, which was unlikely to have given the company time to canvass shareholder opinion. He also said Mirror Group's 20 per cent shareholding in Scottish Media Group, the television and newspaper group, was a strategic asset. "It is not part of our acquisition strategy to sell bits of the group."
Trinity's offer consists of 0.35 new shares and 40p in cash for every Mirror share. Trinity shares rose by 9p to 495p yesterday, helped by a strong set of preliminary results for 1998 that showed underlying pre- tax profits rising by 13.4 per cent to pounds 83.8m. At yesterday's closing price the offer values Mirror shares at 213p each. Mirror shares closed up 9p at 203p.
Mr Alwood is expected to set out his strategic view for Mirror on Thursday when the company publishes its preliminary results. The company is still talking to Regional Independent Media (RIM), the venture capital-backed newspaper group whose titles include the Yorkshire Post, which has already had a 200p a share cash offer for Mirror rejected.
RIM is this week expected to ask the Department of Trade and Industry to refer its interest in Mirror to the Monopolies and Mergers Commission, triggering an investigation which is likely to take more than three months. Any bid by Trinity would also have to be cleared by the MMC, although the company has yet to decide whether it will pursue its offer.
Mr Graf insisted that an offer giving investors shares in the combined company would be more attractive in the long term. "Shareholders have a choice; they can cash out or stay in a business of this nature, this size, and this opportunity. We believe we can convince institutions this is the right thing to do," he said.