Friday, July 30, 1999 Published at 16:43 GMT 17:43 UK
Business: The Company File
Mirror merger confirmed
Merger of Mirror Group and Trinity creates publishing giant
UK newspaper company Mirror Group and regional publisher Trinity have agreed the terms of their merger.
The new group, to be called Trinity Mirror, will be the largest regional newspaper publisher in the UK.
The terms of the deal value each Mirror share at 271.5p, putting a price of £1.241bn ($2bn) on Mirror Group. Trinity is valued at £800m so the agreement forges a £2bn ($3.2bn) giant.
Trinity is to give Mirror Group stockholders 0.325 new Trinity shares and 82 pence in cash for each of their shares.
After completion, Trinity and Mirror Group shareholders will hold approximately 48.4% and 51.6% respectively of the new company.
The companies said they expected the deal to produce pre-tax savings of £15m by the end of 2002.
Mirror Group shares reached record highs after the announcement, trading up 6.5 pence at 261.5p at 1200 GMT. Trinity shares were down 12p at 571p.
Trinity's 120 regional titles include the Western Mail, the Liverpool Echo and Daily Post, the Newcastle Journal and Wales on Sunday.
Mirror Group owns a handful of regional titles including the Birmingham Evening Mail, the Birmingham Post and the Coventry Evening Telegraph.
Its national newspapers are the Mirror, the Sunday Mirror and Sunday People and Scotland's Daily Record and Sunday Mail.
The new group is to be chaired by Mirror chairman Sir Victor Blank, while Trinity chief executive Philip Graf will perform the same role for the new company. Mirror chief executive John Allwood will be Mr Graf's deputy and finance director.
The two companies had planned to go public on the deal a week ago, but it was put on hold after the government told Trinity it would have to sell its four Northern Ireland titles, including its flagship Belfast Telegraph, as a condition of the merger.
The deal was announced at the same time as the companies published half-year figures in which they both said they were trading in line with expectations.
In the half-year to June, Trinity's pre-tax profit rose to £42.5m, from £36.2m in the same period in 1998. Turnover was £168.0m, up from £161.8m.
Mirror Group's figures for the 26 weeks to July showed that pre-tax profit rose to £55m from £49m, while sales showed a rise to £360m from £355m.
The agreement follows a long-running battle for control of Mirror Group between Trinity and rival bidder Regional Independent Media.
Last week, the Secretary of State for Trade and Industry, Stephen Byers, gave the go-ahead for the merger on condition that Trinity sold off its Northern Ireland publications.
Mirror Group already owns a number of Northern Ireland titles and Mr Byers said he was concerned there should be a range of ownership of newspapers in the region.
Trinity said it had received a number of expressions of interest from potential buyers for its Northern Ireland titles and was confident it could make a sale on favourable terms.
Peter Birch, chairman of Trinity and set to be senior non-executive director of the merged company, said: "The combination of Trinity and Mirror Group will create the largest publishing group in the UK by weekly circulation.
"The merged group will have enhanced scale and financial strength, providing a strong platform for future expansion and enabling it to take a leading role in the media industry."
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