Mirror polls shareholders on RIM bid

Click to follow
The Independent Online
MIRROR GROUP is set to canvass its major shareholders over the next few days after the ailing newspaper group confirmed yesterday that Regional Independent Media Group, publishers of the Yorkshire Post, had tabled an indicative offer that would value Mirror at about pounds 900m.

Mirror's board last night discussed the approach, which was made last Friday to Sir Victor Blank, Mirror's chairman, by Sir Norman Fowler, the former Tory minister who is chairman of RIM. It is expected to issue a formal response in the next few days after receiving advice from SG Hambros, its financial adviser.

David Montgomery, Mirror's chief executive, is today scheduled to make a presentation to City analysts. Although the meeting was arranged before RIM made its approach, it will give Mirror directors an opportunity to canvass City opinion about the proposal.

Shares in Mirror jumped 32.5p to 206p - their highest level for more than six months - on hopes that RIM's interest would prompt a bidding war for the company. Merger discussions between Mirror and Trinity, a rival regional newspaper group, broke down a week ago amid accusations that David Montgomery, Mirror's chief executive, was blocking the deal in an attempt to hang on to his job.

Sources close to PDFM, the fund management group that owns 22 per cent of Mirror, yesterday indicated that it would prefer a share offer for Mirror rather than a cash bid. The fund manager is understood to want a continuing exposure to the newspaper industry. Trinity's offer is thought to consist almost entirely of shares, while RIM would be expected to offer mainly cash.

Trinity said it was watching the situation. "We are not in merger talks, but we're waiting to see how their shareholders react to the news," a spokesman said.

RIM was created last year when United News & Media, Lord Hollick's media empire, sold its regional newspaper titles in the North of England to Candover, the venture capital group.

A successful takeover of Mirror by RIM would be a victory for Chris Oakley, who left Mirror last year to become chief executive at RIM. Mr Oakley was formerly chief executive of Midland Independent Newspapers, whose titles include the Birmingham Post, and continued to run the business after it was taken over by Mirror in 1997.

Mr Montgomery's position was last night looking increasingly precarious. Although it is not clear whether he would be offered a job in the case of a takeover by RIM, he would not become chief executive of the enlarged group. Trinity has already made any merger approach conditional on Mr Montgomery's departure.

A takeover of Mirror is likely to be a drawn-out process because any deal would be investigated by the Monopolies and Mergers Commission. Any deal would also be likely to lead to job losses.

Comments