David Montgomery, the former News of the World editor, has bowed to shareholder pressure and pledged to quit Mecom, the European publishing group he founded, early next year.
The company's three largest shareholders, Aviva Investors, Invesco and Legal & General Investment Management, which collectively hold over 50 per cent of the company, have held a series of meetings with Mecom's board to demand Mr Montgomery's resignation.
The embattled chief executive had remained silent after news of the investors' dissatisfaction broke on Wednesday, but yesterday Mecom announced his "planned retirement" from the group. Shares in the company subsequently rose by 7 per cent.
The company said that although he had the complete confidence of the board, "following pressure from certain shareholders, he has decided to leave". He will step down when the group makes its pre-close trading statement in January.
Mr Montgomery said yesterday that the group he set up in 2000 "has weathered the recession well and is transforming into a broader content business with accelerating on-line revenues. This transformation process will continue for the rest of this year and beyond."
Mr Montgomery is a controversial figure in the industry, and one market expert has called him a "difficult character to get along with". At the News of the World he was labelled "Rommel" and he made his name as chief executive of the Daily Mirror by slashing costs, often through job cuts.
This is the second time he has faced a revolt while at the helm of Mecom. In January last year he overcame a rebellion by the company's own board, prompting five non-executives and the finance director to quit.
The Mecom board, which has already called in the recruitment firm Russell Reynolds, said yesterday it would launch a search to find "the person best qualified to succeed Mr Montgomery".
Insiders said they were likely to block the institution's first choice of Patrick Tillieux, an experienced broadcasting executive from the Netherlands. Mr Tillieux was chief executive of the European broadcaster SBS, before becoming chief operating officer at ProsiebenSat.1, which he left last June.Reuse content