QUESTIONS over the future of the Daily Mirror were raised last night after it emerged that Sir Victor Blank, its chairman and a staunch opponent of a sale of the newspaper, is to quit.
Sir Victor, who oversaw the merger of Trinity, the regional publisher, with the Mirror group seven years ago, is expected to announce that he will stand down from his post to take up the chairmanship of Lloyds TSB, the bank.
City sources said that the departure of Sir Victor — who is understood to feel that it would be time-consuming to do three high-profile jobs (he is also chairman of GUS) — would remove the key obstacle to a sale of the flagship title. Effectively, they said, it opened the door to a sale.
Trinity Mirror has received a series of approaches over the past few years. In 2003 Candover Investments offered £500 million for the national titles. Before that, Candover and Apax teamed up to offer a 450p-a-share bid for the whole group.
Yet while the City can see logic in selling off the newspaper and concentrating on the regional titles, Sir Victor has been reluctant to entertain bids.
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Private equity firms that have considered making an approach are said to have perceived Sir Victor as an “insurmountable obstacle”.
In common with other newspapers, the Mirror has faced the dual pressures of increased costs and circulation decline. While attempts by Sly Bailey, chief executive of Trinity Mirror, to cut costs have boosted both profitability and the share price, the group continues to suffer — it said in December that the company continued to face “cost pressures” — and the decline in its circulation has been more marked than that of its peers.
Those in favour of selling off the national titles, including The People and the Sunday Mirror, say that such a move would create a purely regional newspaper business, which would trade on a higher stock market rating than Trinity Mirror does.
Trinity Mirror, which itself is bidding, in conjunction with CVC, the private equity firm, for Northcliffe, the regional newspaper arm of Daily Mail and General Trust, is the market leader with a 20 per cent share in the regional newspaper market.
Any move to put up for sale the Daily Mirror and/or the other national titles would prompt a flurry of interest. Private equity groups such as Apax, Candover, Providence, Cinven and CVC would be expected to register interest. Among trade buyers, Axel Springer, the German newspaper publisher, is a likely contender given that it has in the past shown interest in the paper. David Montgomery, the former Mirror Group boss, would also want to be involved.
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Sir Victor’s proposed move to Lloyds — which is yet to be announced — also throws up other concerns because of his role as chairman at GUS, another FTSE 100 company. Under corporate governance guidelines no one should chair more than one FTSE 100 company.
Some sources say the planned split of GUS this year would provide the ideal time for Sir Victor to leave that company, but he has criticised the Higgs governance rules. He was quoted as saying: “It seems to me that Derek [Sir Derek Higgs] has emasculated the role of the chairman.”
The move to Lloyds will also raise questions about the future of the bank. It is widely regarded as the most likely bank to sell out and has been mooted as a target for Bank of America.
The insertion of Sir Victor, a well-regarded deal-maker, could be seen as the start of preparations for a sale.