Talbot will hold out for highest MGN price: Administrator denies talk of early sell-off

JOHN TALBOT, the administrator who controls 54 per cent of Mirror Group Newspapers, said yesterday that he was determined to increase the value of the stake as far as possible before selling it off, in order to maximise the return to all creditors, including banks and Maxwell pensioners.

A spokesman for Mr Talbot, who was appointed by the courts to wind down the late Robert Maxwell's private business empire, dismissed as 'premature speculation' suggestions at the weekend that he might be planning a pounds 300m public sell-off of his MGN stake in September. He said no decision had been taken on how or when the stake would be sold.

'Mr Talbot doesn't want to hold the shares forever but he wants to get as high a price as possible, in order to pay back all the creditors, including the banks and the pensioners,' the spokesman said. 'Mr Talbot will continue to be in close touch with the MGN board.'

Last Friday Sir Robert Clark, MGN's chairman, ignited speculation about a possible public sale of the administrator's shareholding when he told the company's annual meeting he wanted MGN to remain independent, with as broad an ownership as possible.

Sources close to Mr Talbot and MGN stress, however, that there are still a number of options open, and the timing could be September, next spring or even later.

'It all depends on how much more upside there is in the MGN share price and how much further chief executive David Montgomery can improve profitability,' said one source. 'It's something of a moving target.'

Mr Montgomery was appointed by Mr Talbot as part of a new management team to cut costs and rebuild MGN's fortunes. 'If Talbot had sold out to a corporate buyer a year ago when the share price was on the floor the creditors would have got a poor return,' one source close to the administrators said.

Shares controlled by Mr Talbot were pledged as security by Robert Maxwell against bank loans he took out in 1991. The current share price of 139p, which values the administrator's stake at roughly pounds 275m, has risen from 88p at the start of the year. The banks hope that eventually MGN's stock market rating will come level again with other newspaper publishing companies, in which case the stake would be worth about pounds 300m.

A source close to Mr Talbot said last night that the banks might want a quicker sale than the other creditors of the Maxwell private empire, who include thousands of Maxwell pensioners. But the ultimate decision will lie with Mr Talbot.

The merchant bank NM Rothschild has been advising Mr Talbot on the eventual sale of the MGN stake, but suggestions that the blue-blooded stockbrokers Cazenove will be appointed as brokers to the sale were described as 'premature' by sources close to Mr Talbot. Warburg was also understood to be in the running.