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David Montgomery, one of the biggest names in the world of British newspapers, today announced plans to resign from his Mecom media group, citing “pressure from certain shareholders”.
Big holders Aviva and Legal & General, with the support of Invesco, wanted to oust the former chief executive of Mirror Group Newspapers, break up the company and focus on its large Netherlands operation under a new Dutch chief executive.
The trio represent more than half the shares in Mecom.
Montgomery said he will retire in January. The move represents a partial victory for the shareholders. They also called for chief operating officer Keith Allen to be ousted but failed in their attempt.
They also failed to have Patrick Tillieux — a Dutchman and the former boss of European media group SBS — accepted as Montgomery's replacement. He would have led a strategy of ditching the company's non-Dutch businesses —mainly newspapers in Denmark, Norway and Poland.
Mecom executives met Tillieux but decided his was the wrong strategy. To pacify shareholders, Montgomery agreed to stand down. “He offered his head on a plate to avoid the carnage of an EGM,” said one source.
Shareholders have been said to be “satisfied for the time being” with the sacrifice.
Montgomery's departure will bring to an end a turbulent episode in the 61-year old's career. He set up Mecom in 2000 to buy and consolidate Continental newspapers. But he overstretched the business to the point where last year it needed a rescue rights issue and suffered a boardroom coup that saw six directors resign.
