Byers drops Trinity in a real gunk

Outlook

FOR A minister who claims to want to take the politics out of competition decision making, Stephen Byers, the Trade and Industry Secretary, shows an extraordinary propensity for meddling. Two weeks ago, he largely refused to abide by the recommendations of the Competition Commission on Milk Marque. The commission's findings on the British Airways takeover of CityFlyer were also subtly but crucially tampered with earlier this week.

Now he's decided to ignore the commission's proposed remedies for allowing Trinity's pounds 1.3bn bid for Mirror Group, and instead impose some of his own. To most people it might not seem to matter very much which Northern Ireland newspaper titles Trinity is made to dispose of as a condition of its bid, but to Trinity's Philip Graf it matters a lot. The Belfast Telegraph is an extraordinarily profitable cash cow of a regional newspaper, and the real jewel in Trinity's crown. Last year, it might have accounted for perhaps as much as 25 per cent of total profits.

Is Trinity really going to want to swop this lucrative local monopoly for the far less profitable Northern Ireland titles of Mirror Group?

And even if Trinity is prepared to make that sacrifice, how credible is a renewed shares bid for Mirror Group going to be with such a hole in its profit and loss account opening up? Trinity would already have had to stretch to break point to mount an acceptable offer for Mirror. Advisers insisted last night that this latest turn of events would not damage the endeavour beyond repair, but everyone agreed it was a quite considerable setback. To use a Northern Ireland expression, "it's a real gunk".

Trinity will be fuming, but as it happens, Mr Byers is probably justified in ignoring the Competition Commission's recommendations. The Irish News and the Belfast-based News Letter, the two papers that most reflect the two sides of the great divide in Northern Ireland, would have stood little chance of survival against the combined might of the Belfast Telegraph and The Mirror. On both political and competition grounds, then, the Competition Commission identified the wrong disposals. Mr Byers will be revisiting his view that competition decisions should be vested in a fully independent organisation.

As for Mirror Group, the game would now appear to be wide open once more, with both mooted financial bids back in with a chance. Who knows, Mirror Group's former chief executive, David Montgomery, backed by KKR's money, may be making a triumphant return after all.