With the proposed pounds 1.6 billion merger of the national
newspaper group, Mirror, and the biggest regional newspaper group,
Trinity, poised to go through, all eyes are on the forced partnership of
the chief executive-to-be, Philip Graf, and his deputy, John
Graf and Allwood, respectively the chief executives of Trinity and
Mirror Group, have spent the week following the merger announcement
parading in front of Mirror Group’s key shareholders to convince them
that the deal is in their best interests.
Mirror Group’s largest fundholder, Phillips & Drew, has already given
the merger its support. And once Mirror Group has gained approval from
half its shareholders, any interlopers hatching plans for a rival bid
will be banished.
It’s telling that, during this round of merger talks, there has been no
quibble about Graf heading the merged group. When merger talks took
place last year between Graf and David Montgomery, the former chief
executive of Mirror Group, it was said one of the major stumbling blocks
was the latter’s refusal to relinquish his position.
Roger Eastoe, managing director of Mirror Group, who was originally
recruited by Montgomery, describes Allwood as ’a plain-speaking,
reasonable man who doesn’t play his cards too close to his chest and is
an effective businessman. You can judge by that comment that maybe there
was a very different style here before. People like myself have been
left to get on and motivate the business and come up and drive it.’
The convivial and self-effacing Allwood couldn’t be more at odds with
the character traits of his predecessors, Montgomery and the infamous
Trained as an accountant, Allwood worked as a finance director for News
International, BSkyB, Orange and Mirror Group. He’s credited with
cleaning up Mirror Group’s City profile in the wake of its unpleasant
public spat with Montgomery, as well as honing down its diverse
Eastoe says: ’John has made three decisions which were no-brainers -
selling the STV shareholding, moving on the Holborn Property situation
(Mirror Group’s old premises, which were recently sold), and closing
Referring to the way Allwood will operate alongside Graf, Eastoe adds:
’He will be the powerhouse in the financial area of the business, and
I’m sure it will be a positive relationship (with Graf) because it was a
merger which we all wanted.’
Graf has considerable standing in the regional newspaper market. He is
credited with moving on the entire standing of the business following
his successful acquisition of Thomson Regional Newspapers in January
1996, which doubled Trinity’s size.
Mike McCormack, chief executive of Amra, the regional sales house that
was recently acquired by Trinity, says: ’For Trinity to buy Thomsons was
incredible. It was an amazing coup, especially to get it at such a good
price at the time. It triggered a lot of deals that have since taken
place, and has completely revolutionised the sector. He’s a dynamic
Like Allwood, Graf is down-to-earth and approachable, prone to cracking
jokes and talking far too fast. He couldn’t be more different from
Montgomery, who was labelled ’the dour Ulsterman’.
One industry observer remarks: ’He’s a very gregarious character. When I
met Philip recently, each time he laughed he would run around his chair
and keep laughing. He’s unlike Montgomery, who was like the Mona
Graf, 52, was born and bred on regionals, cutting his teeth in
publishing on the Belfast Telegraph - the cash cow that he will be
forced to give up when the merger deal goes through.
Although Montgomery is reported to have disparaged Graf’s ability to
handle national newspapers, the general opinion is that it would be
unwise to underestimate his capabilities.
Underneath his jokey exterior, there is a shrewd operator, according to
Freddie Johnston, chairman of Johnston Press. ’He’s much more profound
than first impressions make you feel. He will come over as the joker,
but he’s very good at not batting an eyelid. You don’t know what he will
do next,’ Johnston says.
There has been speculation that one of Graf’s biggest problems will be
managing the demanding budget requests from The Mirror’s editor, Piers
Morgan, who, along with Eastoe, has managed to turn around the fortunes
of the newspaper through a programme of continued investment.
But Morgan claims to be another Graf supporter. He says: ’As for the
suggestion that, as a regional newspaper man, he won’t be able to cope
when I barge down his door demanding pounds 20 million, I have two
The first is that I would always knock first. And the second is that it
will be pounds 30 million. The critics who sneer that regional people
can’t run nationals need to ask themselves where all Mirror Group’s top
managers and journalists came from originally. If Graf runs us even half
as well as he’s run Trinity, then we’ll be laughing.’
The roles for Graf and Allwood seem clear-cut, as summarised by Paul
Richards, the media analyst for WestLB Panmure: ’Graf will concentrate
on strategic issues, while Allwood will be very capable of running the
individual businesses.’ And Mirror Group insiders point to the fair way
in which the senior positions within the merged company have been
divvied up - with four executives from each side on the board and an
equal number of non-executive directors from each group.
Graf and Allwood have evidently spent too long with each other already,
with both performing an unnerving double act during a conference call
this week. Graf starts to answer a question, Allwood cuts in and then
Graf finishes off the final part of the answer. For the moment, it seems
the duo will operate in perfect harmony.