David Montgomery, and his Mecom investment vehicle which has been collecting newspapers across Europe, seems to be gaining new friends among london’s institutional investors.
Remember that back in July when he acquired Orkla Media in Norway there were rumours that he could not raise enough money in the City. In the even the Orkla group, keen to get rid of their media arm, took Â£73 million in Mecom shares and made a loan of Â£93 million.
Now Orkla has sold its 20% share in Mecom to various new and existing shareholders following a series of presentations to institutional investors. And the price of 68p a share gives the Norwegian group a nice Â£25 million profit.
Kristine Lowe who, as ever, is on top of this story, quotes an employee representative as saying: “I think they realised they would have attracted a lot of criticism for some of the unpopular decisions Mecom makes.”
As a result of the sale, Orkla’s Roar Engeland leaves the Mecom board. In the Mecom announcement Montgomery said: “We are delighted to have widened our shareholder base as a consequence of the placing.”
Only last week employee representatives from Mecom businesses in Norway, Denmark, Holland, Germany and Poland met in Oslo to set up a formal network. They fear that the 713 job losses announced for 2007/8 will not be the last and that the high demands for profitability will need more extensive cost cutting.