GERMAN media giant Axel Springer Verlag last night confirmed speculation swirling around the Frankfurt stock exchange and the City that it was considering making an offer for Mirror Group Newspapers.
MGN, which has a near-20% stake in Scottish Media Group, owner of the The Herald and the Evening Times, has seen its share price sprint over the past few days on speculation of a possible offer.
Yesterday, MGN stock closed 6.5p ahead at 218p. MGN also owns the Daily Mirror, Britain second-biggest selling daily, and two Glasgow-based titles, the Daily Record and the Sunday Mail.
A statement from the German group said: ''Axel Springer is considering a number of opportunities, including Mirror Group Newspapers, which might or might not lead to an offer.''
But it added: ''That said, Axel Springer has no financial interest in Mirror Group Newspapers and has made no offer to Mirror Group, nor is it in a position to know whether it would make an offer''.
A spokesman for Mirror group declined to comment on the Springer statement.
The German company said it wished to clarify earlier comments made following media speculation that it was poised to bid for
Mirror Group. Springer said it may have more comments to make if its position on Mirror Group changes.
Ahead of Springer's statement, UK analysts had not been dismissive about the bid rumours, which had emanated from Europe. Brokers had been suggesting that a bid could be in the region of 250p a share for a company that has a cash flow of around #150m a year but whose strategy and sense of direction has been questioned.
Credit Lyonnais analyst Gareth Thomas said Mirror shares made a sensible target in view of their current price.
''We think the stock is very, very under-rated. It trades at a big discount to the rest of the market,'' he added.
Springer has expressed an interest in British media and
Mirror Group was thought to be an obvious target. Analysts have taken the view that the company has seriously underperformed and a seasoned player like Springer could inject some energy and dynamism into the UK group.
In March, MGN sold its 46.4% holding in the London-based Independent newspaper to Irish tycoon Tony O'Reilly's newspaper group of the same name.
There was speculation in the City at the time that Mirror Group was unhappy with a stake in a loss-making paper like the
Independent.
Mirror Group, which reported a 12% leap in pre-tax profits to #92m in 1997 on sales of #559m, acquired Birmingham-based regional newspaper group
Midland Independent Newspapers for around #300m in October last year.
The deal was the biggest since the company was plunged into financial turmoil after flamboyant owner Robert Maxwell was lost at sea after falling off his yacht in 1991.
Springer Verlag, which has a huge operation in Berlin, is one of Germany's biggest publishing empires. It was founded by the late Axel Springer as a conservative voice in the Cold War years.
Springer detested the
Communist-led German
Democratic Republic and used his newspapers to campaign for
German unity. Springer papers welcomed the collapse of the GDR in 1989.
The Springer group has seen boardroom battles and has undergone management changes in recent years. Its two most popular newspaper titles are Bild Zeitung, a racy tabloid, and Die Welt, a broad-sheet that is heavy on
political and international news.
The Springer company wields considerable influence in
Germany, particularly within the ruling Christian Democratic Union party of Chancellor Helmut Kohl.
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