Mecom Group, the London-listed newspaper publishing group, has seen its tumultuous years of difficulties come to an end after being sold for £196m to Belgium-based media company De Persgroep.
Under the terms of the agreement, announced yesterday, De Persgroep will pay each Mecom shareholder 155p a share in cash, equating to a 35 per cent premium on last Friday’s share price of 115p.
De Persgroep, founded by the Van Thillo family and still a private family business, has major operations in Belgium and Dutch media markets. It had 2013 turnover of approximately €900m (£720m), with 51 per cent of its revenues from Belgium and 49 per cent from the Netherlands.
The Belgium-based company will be looking to gain from Mecom’s remaining Dutch and Danish divisions, which have a total daily readership of 2.5m and 500,000 respectively, and consider its options with Mecom’s national and local radio stations, which have approximately 1m listeners.
Mecom had suffered heavily in recent years from factors including the fallout from the global financial crisis, the continuing Eurozone weakness affecting its core market, and the difficult issues affecting print media.
As a result, in 2012 Mecom announced a strategic review to examine all options for the group to maximise shareholder value. This led to a process of asset sales to reduce the significant debts of the group.
Challenging trends continued in 2013, however, with total revenue down 11 per cent to €807.9m, including a 21 per cent fall in advertising revenue and a four per cent decline in circulation revenue from its papers.
Rory Macnamara, chairman of Mecom, said “The transaction marks the successful culmination of the strategic refocusing of the Mecom Group over the past two years and we are grateful to all of our employees for their efforts and support during this period of change.”
Mecom shares soared by 32.83 per cent on the news to finish on 152.75p.
THE HISTORY OF MECOM
Mecom was founded in 2005 by David Montgomery, the former chief executive officer of the Mirror Group and former editor of the now-defunct Today newspaper.
The company had assets in Denmark, Germany, Norway and the Netherlands, with Montgomery believing there were economies of scale involved in putting a myriad of European newspapers together.
Mecom was first listed on the Alternative Investment Market in 2005, and three years later it was admitted to the London Stock Exchange. It was a member of the FTSE 250, but the company dropped out of the index in late 2008.
In 2012, after continued poor trading conditions, declining advertising revenues and large debts, the group held a strategic review, leading to a wave of asset sell-offs.