Mirror Group plc's shares rose yesterday, driven by renewed bid speculation as the British newspaper group braced for a boardroom showdown over the future of chief executive Mr David Montgomery.
Mirror's shares jumped 4.55 per cent amid reports that the company's board may force Mr Montgomery to resign if he doesn't quit voluntarily at a board meeting today.
Traders and analysts attributed the rise to renewed talk that Regional Independent Media Group (RIM) might raise its rejected offer for Mirror, which publishes national tabloid the Mirror as well as a string of regional titles.
Last Thursday, Mirror's board rejected the tentative 200 pence per share, or £913 million sterling (€1.3 billion) takeover bid by RIM, but said it was open to talks.
"There was talk at the weekend about further bid speculation, possibly from RIM or somebody else," a dealer said.
"It also may well be hopes that Montgomery will go," an analyst added. "The assumption of course would be that if he goes, then the path to disposing of this group is made easier."
Mr Montgomery's management role is widely seen as one of the main sticking points in the recent failed merger talks between Mirror and another regional newspaper group, Trinity.
The failure of those talks reflected a split between Mr Montgomery and Mirror's non-executive chairman, Sir Victor Blank, who joined the company about six months ago.
"It's assumed that Victor is going to push for David's resignation tomorrow," one industry source said yesterday, noting the conflicting predictions about the outcome of today's meeting.
At the board meeting last Thursday, only five non-executive directors, including Sir Victor, appeared to side against Mr Montgomery, the source said. Mirror's board has 13 directors, consisting of six non-executives and seven executives.
But the Financial Times reported that the executive directors have been asked to abstain during any no-confidence vote, given that institutions holding 31 per cent of Mirror shares see him as an obstacle to a takeover or merger.
Under that scenario, Sir Victorwould have a clear majority among the non-executive directors.
Mirror declined to comment, as did its largest shareholder, Phillips & Drew Fund Management.
