Montgomery resigns with pounds 1m pay-off

Click to follow
The Independent Online
AFTER A week of scheming and spinning, David Montgomery's passing as Mirror Group chief executive came almost as an anti-climax.

He gave his resignation to the company's board yesterday, heading off the humiliating prospect of a vote he would have lost. His departure is a victory for the group's chairman, Sir Victor Blank, who believed Mr Montgomery was an impediment to selling the company. Mr Montgomery said: "During my time as chief executive over the last six years the group's value has almost quadrupled."

He is expected to leave with about pounds 1m in salary, pension and share benefits. A friend said the former News of the World editor had no immediate plans: "Up until a matter of hours ago he didn't think he needed any post- Mirror plans."

But a Mirror source said it was too early to rule out his return: "I wouldn't be surprised to see him come back, advising someone who is trying to buy us. He knows the company and may feel he has a point to prove after being forced out." He could even lead a buy-out of the Mirror's national titles. The companies openly interested in the group, Trinity and Regional Independent Media, are regional newspaper companies that would probably sell the national papers.

Other options for the man ultimately responsible for L!ve TV, the channel notorious for topless darts and the news bunny, could be television or new-media. When he left News International in the early Nineties he tried to start a cable television company.

More remote is the possibility that he would return to his native Ulster to take part in politics. He used Mirror Group's ownership of the Unionist Belfast News Letter to support the peace process. He is close to the Unionist leader David Trimble.

Mr Montgomery's immediate replacement as chief executive will be John Allwood, director in charge of Mirror Group's regional newspapers.

The future of the group is almost certain to be a takeover by another media company. Mirror Group has suffered from a low valuation in the City, which has prevented it raising money to expand, despite its ability to generate cashflow. A new owner with a new strategy could use that to raise funds to expand the business in new areas. Bidders such as Axel Springer in Germany and the American Hearst Corporation are thought to be interested, especially if a regional press group makes the initial purchase and decides to break up the company.

Mr Montgomery's departure casts uncertainty on projects in which he had a personal interest. L!ve TV is expected to start making a profit this year and may be safe after making job cuts late last year. However, the much-delayed relaunch of The Sporting Life may have lost its strongest supporter.

There has also been speculation that the group's ailing Sunday national newspapers, the Sunday Mirror and The People, may be facing a radical overhaul.