Lord Hollick poised to take control of Mirror Group (CORRECTED)
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Your support makes all the difference.CORRECTION (PUBLISHED 14 FEBRUARY 1993) APPENDED TO THIS ARTICLE
LORD HOLLICK, head of the media and finance group MAI and a prominent Labour supporter, is pushing for control of Mirror Group Newspapers.
The multi-millionaire, who also chairs Meridian, the new ITV station in the South, wants to add to his media interests by becoming chairman of the Daily Mirror, Sunday Mirror, Sunday People, Daily Record and Sunday Mail stable. He is also keen to ensure MGN remains allied to the left.
MGN insiders say that Lord Hollick, who joined the MGN board as a non-executive director in October last year, is pressing to be made chairman. He joined the board at the time of the surprise appointment of David Montgomery, a close ally, as chief executive.
They point to the imminent appointment of Hambros as the group's financial adviser, in place of Schroders, as further evidence of Lord Hollick's influence. He is on the board, and the bank is also adviser to MAI.
The role of MGN chairman is occupied by Sir Robert Clark, former chairman of Hill Samuel, who has been told he can stay on until the 54 per cent share stake held by the administrator of the Maxwell private companies is sold. That day is approaching as MGN shares edge towards their 1991 flotation price of 125p. They were 50p when trading resumed last July. On Friday, they closed at 112p, valuing the company at pounds 450m.
John Talbot, of Arthur Andersen, the administrator, holds the 54 per cent on behalf of four banks that received the shares as security for loans: National Westminster; Midland; Goldman Sachs and Lloyds. If the shares were sold now it is understood Goldman Sachs and Midland would fully recover their loans. NatWest has indicated its loans would be repaid if the shares were sold at 125p.
Mr Montgomery has received an assurance from Mr Talbot that he will not 'sell the shares over his head'. This is understood to mean that if a buyer makes an offer for the whole 54 per cent, he will be allowed to make a counter-bid. Lord Hollick, Mr Montgomery and Mr Talbot are thought to prefer a placing of the shares as the best way of disposing of the stake.
Hambros' role is expected to include arranging the placing of the 54 per cent among friendly institutional investors. Lord Hollick would be likely to take a personal holding - independently of Hambros, Mr Montgomery and MAI (under the law, the owner of a TV station is forbidden to hold more than 25 per cent of a newspaper group) to avoid accusations of a conflict of interest.
An associate of Lord Hollick said: 'He has no share options at MGN and is not being paid very much, if anything, but he is working away and spending a lot of time there on the basis that if the banks do sell, he and Montgomery will get first refusal.'
He said Lord Hollick and Mr Montgomery 'went into MGN on the understanding that the banks would give them sufficient time to put the company on a firm footing. The banks have assured the board that before they sell they will tell the board. Any sale will, in effect, be made in conjunction with the board.'
A consortium put together by Hambros to launch a bid for MGN last year was unlikely to be revived.
Lord Hollick declined to comment.
CORRECTION
LORD Hollick says that, contrary to our report of 31 January, he has no plans to become chairman of Mirror Group Newspapers or to take control of MGN. He asks us to point out that Sir Robert Clarke has agreed to remain chairman of MGN at least until the annual meeting in 1994.
(Photographs omitted)
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