Tuesday, July 03, 2007

Never a dull moment at PCM

The Dutch newspaper soap goes on. Having bought out Apax at an exorbitant sum of money, PCM saw the future with the Northern regional newspaper and book publisher NDC. They company even kicked out its CEO Mr Ton aan de Stegge, preparing the seat for the CEO of NDC. But yesterday the news came that PCM and NDC will not merge, as the managements could not agree on a common agenda.

So, more than three months have gone by. In the meantime the company is moving to new venues. It has published a daily free broadsheet DAG, which took care of some excitement. But no strategic decisions were taken as the proposed merger was being studied. And after three months, the conclusion is that both companies look like each other and a merger would be more of the same. PCM has national newspapers; NDC has regional newspapers. PCM has a book division with many imprints; NDC has a book division with many imprints. In short, more of the same. No real synergy. And if the two companies would have merged a cut of people and a cut in book titles would have been the logical conclusion to get to profit fast (at last for PCM).

The decision not to merge has been taken last Friday when the financial man of PCM and CEO ad interim Bert Groenewegen argued in a meeting of management, share holders and governors of both companies not to merge. Groenewegen had been the project manger for the study of the proposed merger.

Calling off the merger is not a problem for NDC as this has a good management in place and makes a handsome profit. But what will it mean for PCM. This company has had freak management since more than two years, had been governed by a weak group of directors and has lost a lot of money to Apax, while the newspapers were doing well. The CEO of NDC was seen as the saviour of it all. Now they have only a CEO ad interim, but one who worked with Apax (which is not a recommendation in these quarters).

So the board of directors will have to go after a new CEO fast. That is not easy as there are not many ex-CEOs with publishing experience and management experience of such a company. I personally would offer two names, one of an ex-CEO and one of a turn-around manager.

But having a quality CEO will not only suffice, I am afraid. The company better starts looking for a (foreign) company which will take over the newspaper and book conglomerate. Banks will not touch PCM any more, not even with a barge pole. And the publishing company will hopefully have learned from the Apax adventure and not invite a private equity investor. So there might be a business opportunity for a business related company. In The Netherlands there is no related company big enough for this. So foreign companies should perhaps look into the opportunity. As the Amsterdam newspaper Het Parool separated from PCM and was eventually acquired by the Belgian media holding De Persgroep owned by the family van Thillo, it would be a reversed take over, if the Persgroup would make an offer. It will not be the UK media investor MECOM, unless it will drop its plans for acquiring Wegener immediately. Or does the salvation come from the East, from a German newspaper publisher such as Holzbrinck? Or does Rupert Murdoch have PCM on its radar already, considering NRC-Handelsblad to be theTimes of The Netherlands?

Or will PCM go back to the last strategic proposal under Ton aan de Stegge, which would sell off the book division, except for the educational part? PCM would become a nice newspaper publishing company again and open to become a crossmedia publisher. Economically the company would be dependant on advertisement income, but it could at least seriously enter into the field of internet and venture internet radio and television.

One thing is certain: there is more news to come from PCM. And as I have said before: there is never a dull moment at PCM.

Blog Posting number: 802


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