CLOSE-UP: NEWSMAKERS/PHILIP GRAF AND JOHN ALLWOOD - Newspaper stalwarts form convincing double act. The two execs are working together to sell the Trinity merger, Anna Griffiths says

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 Allwood.

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

Allwood.



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

Robert Maxwell.



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

portfolio.



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

Sporting Life.’



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

character.’



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

Lisa.’



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

observations.



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.



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