Tuesday, January 26, 1999 Published at 13:44 GMT
Business: The Company File
Montgomery quits Mirror
The boardroom battle is over, David Montgomery is the casualty
David Montgomery, the chief executive of the Mirror Group, has stepped down from his post at the crisis-hit newspaper publisher. The company announced that he resigned as a director with immediate effect.
John Allwood, formerly finance director and currently director of Mirror Group's regional and Scottish divisions, has been appointed as new chief executive.
He left after an acrimonious boardroom battle during which he lost the confidence of major shareholders.
In a statement, Mr Montgomery said it was "an opportune time" to leave the company now that it seemed "to have an independent future".
"I believe my departure could create the conditions that could lead to further enhancement of shareholder value."
This is a reference to demands from the regional newspaper group Trinity, who said it would only bid for Mirror Group if Mr Montgomery left.
Trinity said it was "watching the situation with interest" following Mr Montgomery's departure.
"We've always maintained that we have seen a very strong logical combination that could arise from putting the two groups together. However, we are not currently in talks," a Trinity spokesman said.
In the boardroom battle, the directors had to choose between David Montgomery, the group's controversial chief executive, and Sir Victor Blank, the City financier who was appointed Mirror's non-executive chairman last summer.
In the way of progress?
The downfall of Mr Montgomery came as no surprise. He had lost the support of Sir Victor and some of the group's major shareholders for standing in the way of takeover talks with Trinity.
The boardroom ructions could not have come at a worse time for Mirror as predators circle the group.
It has already rebuffed a £913m bid from Regional Independent Media, backed by venture capital group Candover. Now the regional newspaper group appears ready to up its offer. There is also speculation that US newspaper group Hearst Corporation could enter the fray and make a counter-bid for the group.
The messy feud follows a poor performance at the Mirror over the past few years, both in terms of profits and share price.
The paper has lost readers to rivals like The Sun and attempts at "repositioning" have failed to win them back.
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