Mirror Group Seeks Shareholder Approval Of £108m Scottish Media Disposal

The Mirror Group is attempting to rally shareholder support for the sale of its 18.6% stake in Scottish Media Group (SMG) in order to sidestep a possible intervention by the Takeover Panel. The Mirror considers its holding in SMG, owners of Scottish Television and Grampian, a non-core asset.

The Mirror Group is currently the subject of takeover bids from both Trinity International and Regional Independent Media (RIM), both of which are being examined by the Monopolies and Mergers Commission. Trinity has complained that the sale of Mirror Group assets during the period of takeover should not be permitted. Under Takeover Panel rules a company may not sell any part of its business which accounts for more than 15% of net assets without a majority shareholder backing. It is this backing which Mirror intends to gain.

Industry speculators believe that Trinity wants Mirror to retain the debt burden attached to the SMG stake as a Mirror Group with less debt would permit RIM to gain more backing from its venture capitalists and thus raise its bid. To date, the Mirror Board has rejected a £913 million bid from RIM (see Mirror Group Rejects £913m RIM Bid) and a £1 billion bid from Trinity (see Mirror Group Swiftly Rejects £1 Billion Offer From Trinity).

By Friday afternoon, Mirror Group had gained approval of the SMG sale by shareholders representing 40% of the company’s stock. These include PDFM, Hermes and Prudential. The agreement is that Mirror will not accept a price of less than £9 per share for the SMG stake, valuing the holding at £108 million.

It is expected that Mirror will not have trouble gaining the required 51% support for the sale, with an approval possibly only a few days away.

Mirror Group: 0171 293 3000 Scottish Media Group: 0141 300 3000