Reach plc, the British publisher behind the Daily Mirror, has acknowledged the announcement by National World PLC (LSE:NWOR) that it is considering a possible offer for the entire issued and to-be-issued share capital of the company.
Following the announcement, London-listed Reach confirmed that it has yet to receive an approach from media investment firm National World.
Reach’s board said will “issue a further statement if and when appropriate,” but in the meantime, “Reach shareholders are strongly advised to take no action”.
A successful bid would be a further consolidation of the British newspaper publishing sector, as well as a full-circle affair for National World chair David Montgomery.
Montgomery served as chief executive of Reach's predecessor Mirror Group between 1992 and 1999 following a stint as director of Murdoch’s News UK Ltd.
Montgomery went on to form Local World Limited in 2012 before selling the company’s 100 regional newspaper titles to Reach in 2015.
Reach struggles with advertising revenues
Reach plc, which also publishes the Sunday Express, the Daily Star Sunday, as well as celebrity magazines New! and Star, has struggled to adapt to falling print circulation which has placed greater emphasis on digital revenues.
The company reported a fall in third-quarter revenues this October as digital advertising sales plummeted.
For the quarter, group revenues fell 1.9%, including a 4.1% decline in September.
Reach journalists went on strike in September when salary negotiations broke down; the action was called off after one day following a revised pay offer and the death of Queen Elizabeth II.
RCH shares have responded well to the takeover speculation, having rallied nearly 20% this week, but year-to-date losses still remain at over 61%, giving the company a current market value of £335mln.