Shares in National World, the media group whose titles include Yorkshire Post and The Scotsman, have surged to their highest level in more than a year after a takeover offer with over £56m was revealed.
Irish media group Media Concierge, which is London-listed National World’s largest shareholder with a 26 per cent stake, has tabled an offer worth £56.2m.
The offer, is a 40 per cent premium to National World’s closing price on Thursday.
After the takeover offer was revealed, shares in National World jumped by more than 16 per cent to 17.5p each, their highest for more than 12 months.
They first surged by 23 per cent to 18.5p before falling back down slightly.
Media Concierge, which owns the likes of Mediaforce, The Leaflet Company and Iconic Media Group, is seeking to acquire the 74 per cent of National World that it does not already own.
The group has until 5pm on 20 December to announce a formal intention to make an offer or withdraw.
National World, which is headquartered in Leeds, operates over 100 newspapers and websites in the UK and is run by David Montgomery.
In its half-year results, National World posted a revenue of £48.8m, up from £41.6m, while its pre-tax profit nudged up from £1.7m to £2.3m.
For its latest full year, the company’s revenue rose from £84.1m to £88.4m but its pre-tax profit fell from £5.2m to £3.1m.
In a statement to the London Stock Exchange, Media Concierge said: “Media Concierge believes that the possible offer provides a highly attractive and deliverable opportunity for National World shareholders to realise their investment at a substantial premium in cash.”
National World comes out swinging
Responding to the offer, National World said: “National World confirms that it has received the possible offer and the company has undertaken a significant amount of work with the company’s financial and legal advisers to evaluate the possible offer.
“The board has confidence in National World’s strategy for value creation as an independent business but acknowledges the potential merits of the possible offer.”
However, as part of its statement, the group claimed that it had been “made aware of a potentially systemic pattern of historical invoicing irregularities in relation to the activities of entities affiliated with Media Concierge”.
The group added that entities affiliated with Media Concierge are “currently inappropriately withholding revenues due to the Company totalling £4.4m”.
It said: “The company has requested access to historical records to facilitate the Investigation and enable the possible offer to be fully evaluated. A forensic auditor is on standby to assist with the Investigation.
“Entities affiliated to Media Concierge are yet to provide access to the necessary documentation in accordance with National World’s contractual and legal rights to enable the Investigation.
“In consultation with the company’s advisers and counsel, and following engagement with certain shareholders of the company, the board continues to pursue these matters to safeguard shareholders’ interests and to enable it to properly evaluate the merits of the possible offer.
“The company confirms that it holds £10.9m of cash balances notwithstanding revenues withheld by entities affiliated with Media Concierge.”