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National World, one of the UK’s largest regional newspaper owners with The Yorkshire Post and The Scotsman, has clashed with its largest shareholder over a £56mn buyout offer.
Media Concierge, which owns 28 per cent of National World, has offered 21p a share for the business, a 40 per cent premium to its closing price on Thursday. The offer sparked a 27 per cent jump in National World’s shares on Friday.
However, National World said in a stock exchange statement that it was already investigating “a potentially systemic pattern of historical invoicing irregularities in relation to the activities of entities affiliated with Media Concierge”, which related to an advertising sales deal between the two companies.
It said that entities affiliated with Media Concierge were also withholding revenues of £4.4mn.
Media Concierge said the allegations were “completely baseless and are strongly denied in their entirety”. It added that National World had provided no evidence to support the allegations, and noted that the timing coincided with the initial takeover approach.
The amounts that were allegedly “withheld” by Media Concierge were subject to a “substantial counter-claim . . . for a number of breaches of contract by National World”, the company said.
A spokesperson for National World said it was “untrue for Media Concierge to assert that no evidence has been presented”.
National World, run by former Mirror boss David Montgomery, is the underbidder for the Telegraph in a protracted 18-month sales process for the national newspaper.
The approach by Media Concierge, and their dispute, will throw fresh doubt on whether National World would be able to compete for the national newspaper again ahead of a crucial week for its sale.
Media Concierge does not support the attempt to acquire the Telegraph, according to a person close to the group.
The preferred bidder, Dovid Efune, has so far failed to reveal his funding for the offer — with several funds linked to the deal having walked away — before exclusivity expires at the end of next week.
Media Concierge, controlled by Malcolm Denmark, is a direct marketing group and one of Ireland’s biggest local newspaper businesses. Media Concierge on Friday said the offer was a “highly attractive and deliverable opportunity for National World shareholders to realise their investment at a substantial premium in cash”.
A former editor of Today newspaper and the News of the World, Montgomery has a reputation for ruthless cost-cutting and aggressive dealmaking.
The person close to Media Concierge said the group had become frustrated with this approach to the newspaper group’s operations, which has resulted in running battles with unions while margins had also not improved sufficiently.
Media Concierge had already abstained in the re-election of Montgomery at the last shareholder meeting, a person close to the group said, signalling its dissatisfaction with his leadership.
Montgomery acquired the Johnston Press newspapers, owner of The Yorkshire Post, The Scotsman and the Sheffield Star, in 2021 for just £10mn, to form National World.
Montgomery previously founded Local World in 2012, building up more than 100 UK regional newspaper titles. The company was sold in 2015 to Reach.
Montgomery was chief executive of Mirror Group following the death of proprietor Robert Maxwell in the 1990s, going on to set up Mecom in 2000.
Aim-listed Mecom briefly became the second-largest newspaper publisher in Europe with titles in Germany, the Netherlands, Denmark, Norway and Poland. Montgomery announced a “planned retirement” in 2010 after a bruising period of battles with shareholders over its strategic direction.
