Mecom share rise alerts FSA after informal bid talks

The Financial Services Authority is likely to take a close look at a leap in the share price of newspaper group Mecom following a mooted informal takeover approach.

Trinity Mirror approached the European regional newspaper publisher "several weeks" ago to offer an all-share merger, according to Sky News.

Mecom, founded and run by former Daily Mirror editor David Montgomery, turned down the deal.

The Mecom share price soared from below £2 in early January, gaining more than 40p in a few days, which suggests some investors were aware of the talks even if they did not know the suggested terms — a nil premium deal.

The informal talks had not been disclosed to the wider stock market.

The FSA had no comment on the issue today, but is almost certain to investigate who bought the stock and inquire if those people had inside information.

The City watchdog has been desperate to clamp down on insider trading for several years and has scored several major successes in the last few months.

Trinity Mirror, which owns the Daily Mirror and local newspapers across Britain, is a shadow of the company it once was. Its shares jumped 6% to 89.25p today as the Mecom rumours emerged, leaving it valued by the stock market at £230 million.

Mecom shares gave up 0.51p to 241.75p, giving it a market capitalisation of £272 million.

Market sources said the volume of trading in Mecom shares has been below average in the last few days, which suggests that if there was insider trading it was by a small number of investors.