Business Analysis: Another bidder is Blanked after taking a look in the Mirror

The latest approach to get the Blank cold shoulder was one possibly worth £800m from Marcus Evans, a conference organiser. Trinity Mirror shareholders have had to get used to reading numerous stories about approaches for the group or some of its assets, which include leading regional titles such as the Liverpool Echo and Western Mail, over the past couple of years along with the inevitable rebuttal from Sir Victor. Yesterday was no exception, fuelling the anxieties of some shareholders that they may be missing out on a valuable bid.

Tom Shrager, a fund manager with the New York-based Tweedy Brown, one of Trinity Mirror's biggest shareholders, said: "I think £800m is a good starting point for negotiations and they should have taken that seriously."

News of Mr Evans's interest in buying the Daily Mirror emerged yesterday morning at the same time as Trinity Mirror's latest trading update, which showed a 7 per cent decline in advertising revenues at its UK nationals. That news will concentrate the minds of other shareholders even more on the performance of Sly Bailey, the group's newish chief executive who, just over two years ago, embarked on a strategy to "stabilise, revitalise and grow" Trinity Mirror.

One overseas shareholder, who wished to remain anonymous, said: "The problem is not her [Ms Bailey], it's Victor Blank. She is a superb manager, she's driving the business as hard as she can. But she is constrained. Firstly, Piers Morgan [the ex-editor of the Daily Mirror] wasn't fired early enough and he created some credibility issues with the Mirror newspaper.

"And secondly, he [Sir Victor] has been unwilling, in his position as chairman, to seriously consider an auction of the Mirror Group titles. The problem is he doesn't want to be chairman of the Liverpool Echo, although it's a good newspaper and there are wonderful people living in Liverpool. That's the issue there."

Mr Evans, 41, is not an obvious bidder for the Daily Mirror. His eponymous company lays on such international talking shops as Expeditionary Warfare and the separate Urban Warfare. He has a network of international offices controlled by a Bermuda-based investment company. What appears to be his main UK holding company, filing accounts at Companies House, had a turnover in the year to September 2003 of £36.5m. But there are dozens of other international companies bearing his name that together create a maze of private operations feeding into his Bermuda base.

That said, he cannot be dismissed as a lightweight and people close to Trinity Mirror insist the right processes were gone through when he came forward. An approach was made to Sir Victor, who told Mr Evans to speak to Trinity Mirror's financial advisers so he could work out a value. Mr Evans came back with a figure of £800m, which was not what Trinity Mirror wanted to hear.

According to the Evans camp, the first approach was made a year ago and since then there have been "half a dozen" conversations, including chats about Trinity Mirror's other assets. Mr Evans has succeeded in placing himself in the queue, but in front of him are Apax Partners, Candover and Warburg Pincus, all private equity buyers with deep pockets.

Although a bidder with a big enough chequebook could succeed there are barriers to a deal. Lesley Duncan, a fund manager at Standard Life, which owns about 4 per cent of Trinity Mirror's shares, said: "Because operationally so many of the back-office functions of the regional and national titles are now interlinked, someone trying to split them up is going to face a very hard job."

This difficulty is a direct result of part of Ms Bailey's strategy for Trinity Mirror. She has focused on size and scale to make the company more efficient and to save money. She has instigated a group-wide "manufacturing network" resulting in fewer print sites and presses. Its supply chain is now run as a group-wide operation with new five-year contracts in key areas.

The regionals have been forced to adopt best practices and standardised systems and procedures. The nationals have new management and are now subject to what Ms Bailey calls a "ruthless" approach to costs. "We believe she has done a good job given they might not be the best assets," said Ms Duncan.

Certainly yesterday's trading statement showed how tough life is for a publisher of red top tabloids. While the regionals are expected to see advertising revenues grow 1.4 per cent in the first six months of the year, nationals will be down 5.3 per cent, reflecting a 7 per cent decline in UK nationals, such as the Daily Mirror, and a gentle 0.3 per cent fall in the Scottish titles led by the Daily Record.

In May, the Daily Mirror's circulation was down 3.58 per cent on the year before with the Sunday Mirror and the People also down. But circulation revenues for the first half are expected to be up, 5.2 per cent for regionals and 1.9 per cent for nationals, proving you can still milk declining assets for cash.

Where that cash ends up is the other part of Ms Bailey's strategy. The regionals are being revitalised while investment is going into online operations.

As Rupert Murdoch recently pointed out, all newspaper publishers urgently need to make sense of the internet, and Ms Bailey has been doing just that. Her regionals and their websites are being turned into a coherent local, multi-platform publishing and advertising business. Fish4jobs, a joint venture with other regionals, is now the biggest recruitment website in the country and online revenues for Trinity Mirror are starting to blossom.

Since she arrived, the share price has risen from 400p to yesterday's 625.5p. A share buyback programme has continued to funnel cash back to investors and with it, the calls for a break-up are receding.