Mirror up after pounds 297m MIN deal

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The Independent Online
Shares in Mirror Group rose strongly on relief that it would not launch a rights issue to fund a pounds 297m agreed bid for Midland Independent Newspapers (MIN) announced yesterday.

David Montgomery, chief executive, said also Mirror Group was not planning to sell any titles or its 20 per cent stake in Scottish Media to pay for the deal, worth 210p cash per MIN share, with a partial share alternative.

"We do not need to sell anything to fund this deal. Our assets are all performing well and there is more growth to come," said Mr Montgomery.

John Allwood, finance director, added that in the longer term the group might look to buy regional papers where they were not represented, such as the South-east.

Shares in Mirror Group, which first disclosed it was in talks with MIN last month, rose 14.5p to 200.5p. Shares in MIN, which owns the Birmingham Post and Birmingham Evening Mail, the UK's second biggest selling regional newspaper, added 5.5p to 194p.

Mr Montgomery said the acquisition, which will be funded through debt, would expand Mirror Group's role as a main player in the regional newspaper publishing market.

Mirror Group, which owns a large stake in The Independent, has a 54 per cent newspaper market share in Scotland largely through its ownership of the Daily Record. "We imagine that we will at least replicate that position in the Midlands," said Mr Montgomery.

Analysts do not expect there to be a monopoly issue, though the bid automatically triggers a referral to the Department of Trade and Industry.

As well as pounds 5m cost savings next year and further savings beyond, Mr Montgomery said the deal offered significant scope to raise revenues.

Chris Oakley, chief executive of MIN, will join the Mirror board.

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