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National World shareholder calls on board to engage with £56mn takeover bid

Harwood Capital says newspaper group should negotiate a higher offer price

One of the biggest shareholders in National World has called on the company’s board to enter discussions over a potential sale to Media Concierge, which last week made a £56mn takeover approach for the listed newspaper group.

National World, which is one of the UK’s largest regional newspaper owners with The Yorkshire Post and The Scotsman, is at the centre of a takeover battle between its board, led by veteran media boss David Montgomery, and Media Concierge, its largest shareholder, run by Malcolm Denmark.

Harwood Capital, which is the sixth largest shareholder in the company and an investor since its initial public offering in 2019, has pushed the company to engage with Media Concierge to try to negotiate a higher price than the 21p a share offered last week.

Richard Staveley, a partner at Harwood, which owns more than 5 per cent of National World’s stock, told the Financial Times that Media Concierge could “pay slightly more” for the business, which could make the deal acceptable.

Harwood has met with the company this week to discuss the bid. “We are keen for National World to engage with the offer,” Staveley said. “We are encouraging the board to engage fully and agree on a price to vote on.”

Media Concierge, which owns 28 per cent of National World, offered 21p a share for the business, a 40 per cent premium to its closing price before the bid was made public on Friday.

Staveley said he was concerned that the board might not engage fully with the approach, given the two sides are already locked in a commercial dispute that erupted last week in a series of accusations and counter claims.

“It is not good to see this commercial dispute to come up at this point,” said Staveley. “We don’t want to see this dispute frustrating the chance to give shareholders the vote on an offer for the company.”

In a statement, National World said that it had undertaken a “significant amount of work with its financial and legal advisers to evaluate the possible offer”.

It added: “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. The work to evaluate the possible offer continues and further announcements will be made as and when appropriate.”

Over the weekend, Media Concierge said that National World’s advisers had indicated that they would provide access for “limited and confirmatory due diligence” but that this had not yet been provided. Media Concierge said that it was “unclear whether the board of National World has any intention to engage meaningfully”.

The approach from Media Concierge last week prompted National World to reveal that it was inve

The link for previous article if you subscribe :-

https://www.telegraph.co.uk/business/2024/11/22/yorkshire-post-publisher-faces-power-struggle-horce-racing/

Animosity between the two not new ...

Yorkshire Post publisher faces power struggle with horse racing tycoon

Malcolm Denmark tables bid for National World after company’s failed Telegraph swoop

1

Malcolm Denmark

Irish newspaper tycoon and race horse owner Malcolm Denmark already owns more than 25pc of National World Credit: Steve Davies/Racingfotos.com

James Warrington

Senior Business Reporter

22 November 2024 11:26am GMT

James Warrington

The publisher of The Yorkshire Post has been plunged into a power struggle with its biggest shareholder after mounting a failed takeover bid for The Telegraph. The Irish newspaper tycoon and race horse owner Malcolm Denmark, who already owns more than 25pc of National World, has tabled a bid to buy up the remaining shares in the company in a £43m deal.

The move blows open tensions between Mr Denmark and National World’s chairman, the veteran newspaper executive David Montgomery. Mr Montgomery, who holds a 7pc stake, mounted a long and vocal campaign for The Telegraph that ultimately failed in the second round of an auction in September. Any deal would have required National World – a relative minnow valued at just £40m on the stock exchange prior to the takeover offer – to raise hundreds of millions of pounds of fresh capital.

City sources said Mr Montgomery hoped to use the opportunity to massively dilute Mr Denmark’s shareholding and free National World from his grip. It is not the first time the two newspaper tycoons have clashed. Mr Denmark abstained in a vote to reappoint Mr Montgomery at the company’s annual general meeting this summer.

National World subsequently ended its advertising sales deal with Media Concierge, instead partnering with Mirror and Express publisher Reach. Mr Denmark is understood to have instructed lawyers over the matter.

David Montgomery, 76, is known for heavy cost cutting at his titles Credit: Julian Simmonds

In an update to the stock exchange this morning, Media Concierge said it had approached the board with its bid 22 days ago but had received “no substantive engagement”. It urged National World to consider the 21p per share offer, which represents a 40pc premium to the company’s closing price on Thursday. Media Concierge said the bid provided a “highly attractive and deliverable opportunity for National World shareholders to realise their investment at a substantial premium in cash”.

Mr Denmark is understood to be frustrated by a lack of direction at National World, as well as its digital strategy. The publisher has said it will produce half of its newspapers using artificial intelligence by the end of the year.

Mr Montgomery, 76, is known for heavy cost cutting at his titles. National World had slashed more than one in four jobs since buying up more than a dozen titles from collapsed publisher JPI Media in 2021.

Mr Denmark started his business in 1985 with the launch of an advertising agency representing media owners.

Interesting to see if Media Concierge pay up the £4.4 million it is illegally withholding from National World and allow National World access to it records showing irregularities in it's invoice dealing with NWOR.

As for the takeover I hope it is not going to go ahead at an insulting low ball price of 21p.

Investor's Champion podcast mentions Michelmersh Brick as one they like :-

hxxps://www.investorschampion.com/channel/podcasts/episode-39-of-the-investors-champion-podcast

Looks like the basis for this takeover is unsound.

I wonder if it will just unravel next week.

So they have stolen some of NWORS cash and are using it as part of the cash to buy NWOR.

Full comment from interims :-

Pennant International (Defence training, maintenance and software services): This investment is currently the fund's smallest in NAV weighting, however we have been conducting significant engagement to help the business get to position where it can realistically scale in size and have purchased c.10% of the equity. We believe the CEO and the foundations of the current operating business has the potential to achieve this. Our thesis involves the potential provision of further equity investment to support value creative acquisitions in the defence sector via a 'buy & build' strategy. During the period we provided modest additional financial support, through equity investment, as they handle lumpy contract cashflows. We introduced new highly qualified Board members to the group with the skillsets of UK small company corporate finance, financial experience and defence m&a. Software expertise also joined the Board and an Interim CFO was appointed. Restructuring is underway and the company's pivot to software services almost complete. Rome was not built in a day and Pennant is over 125 years old, but it is about to enter a new chapter, our average price paid is 32.8p to date. On current market expectations, the shares were valued on an EV/Sales of 0.8x for their financial year 2025, at period end.

HTtps://www.investegate.co.uk/announcement/rns/rockwood-strategic--rkw/interim-results/8557940

From Rockwood Strategic interims :-

Flowtech Fluidpower Plc (Fluidpower component distribution and manufacture): Interim results were released in September which highlighted underlying progress under the new management team offset by challenging trading conditions. Sales fell by 5.7%, however gross margins have started improving due to pricing and sourcing initiatives. Net debt also fell as inventories were reduced. There has been huge (60%) change of senior management under the new CEO, the disparate brands were only unified under Flowtech in June and the much needed new e-commerce system only scheduled for launch in Q1 2025. Service complaints have halved, operational headcount cut by 25%. External factors thus distracted from an emergent, highly motivated team. A sign of the entrepreneurship we were eventually anticipating emerged in the announcement of an opportunistic acquisition of Thorite Group out of administration for almost no cash outlay. The business has been generating more than £20m in sales and has clear synergies with the rest of Flowtech. We expect a positive impact in 2025 as the business and its assets are integrated with the potential to enhance shareholder value considerably. We commenced buying Flowtech Fluidpower for the strategy in May 2020 at 70p. It closed the period at 90p and has an extended length investment thesis due to the need for a management reset, which was achieved in April 2023. On current market expectations, the shares were valued on an EV/Ebitda of 7x for their financial year 2025, at period end.

Https://www.investegate.co.uk/announcement/rns/rockwood-strategic--rkw/interim-results/8557940

From Rockwood Strategic Interims :-

Facilities by ADF

The 'writers' strike' of 2023 impacted this business which provides premium-quality serviced vehicle hire for TV and Film productions, specialising in high end TV/feature films to some of the world's largest traditional and on-demand content production companies such as Netflix, Amazon Prime, Sky, Paramount+, Disney+, Apple TV, HBO Max, ITV and BBC. The industry appears to have structural growth due to modern demand for attractive content for which ADF's 700+ vehicles provide high quality studio and on-location assets. Sales are expected to have almost doubled in the three years to December 2024. We supported a key strategic acquisition to diversify the business, drive scale and unlock revenue synergies. High barriers to entry abound, supported by strong margins which does not justify a single digit PE ratio. We expect a recovery in trading, further accretive bolt-on acquisitions and a justified re-rating of the shares which we purchased at 50p. On current market expectations, the shares were valued on a PE of 5x for their financial year 2025, at period end.

Stock is a gamble.

Appeals court said that Vehicle Finance companies would have to repay undisclosed commission.

The relevant companies (ie not STB) have appealed to Supreme Court which will hear the appeal in 6 months.

Fear is this will effect STB as a company in the vehicle finance sector.

However, ages to appeal, investors don't know the result and thus lots of uncertainty and volatility for vehicle finance companies like STB, one minute up the next down.

Big gamble

Gavster and Tweedy,

I hope you're both right.

I suppose the government has a bit of a credibility issue in that they said they would boost the economy, but have brought in factors which have supressed growth.

What's the chance that the Labour government will force down the returns on wind power in a move to give cheap power to the "working man". I mean they do seem to detest private industry.

I thought I'd missed a good buying opportunity on this one, but I've taken advantage of todays fall with a couple of buys.

I am prepared to sit on these.

If they fall a bit more I might be back for one more buy.

Steven Noble, CIO, has acquired 257,870 Ordinary Shares at 38.59p

No, if you hold shares in an ISA you do not pay Capital Gains Tax

You have to laugh in an ironic way.

Rachel Revees made a big play about helping business.

However, that MAY mean business will have to pay employers NI contributions on employees pension contributions.

Meanwhile it MAY mean more CGT, more employee pension taxes, take away the inheritance tax break on aim shares.

The free tax element on SIPPs MAY be changed.

Maybe it will change or maybe NOT meanwhile as individuals we fret ...

The government is playing with us, businesses and the economy

I like these long term.

However, I have sold around 20% on the fear of Capital Gains Tax rises.

They did.

The RNS is positive, but no real indication of how much this will add to the bottom line.

The company is not expensive at this price, but probably one for the patient.

You should listen to :-

https://www.investormeetcompany.com interview with the HSP board out this week.

The contracts they are hoping to gain are :-

SIZEWELL C - should take over a lot of HS2 in time

LOWER THAMES CROSSING - they seem a bit more optomistic about this going ahead, but not counted on balance sheer

TUNGSTEN WEST - has had more +ve new recently, but not counting on either

HS2 is best to assume as 2 years, but I believe it's already been extended a couple of times, so it might go on for a bit longer