National World said in a statement released yesterday (3 November) that “it has not yet approached the board of directors of Reach with regard to the possible offer”.

In response, Reach stated: “The board of Reach notes the announcement by National World that it is considering a possible offer for the entire issued and to be issued share capital of the company. The board of Reach confirms that it has not received an approach from National World.

“The board will issue a further statement if and when appropriate. In the meantime, Reach shareholders are strongly advised to take no action.”

National World said in its statement that, as a consequence of this announcement, an ‘Offer Period’ has commenced in respect of Reach, in accordance with the rules of the Takeover Code.

This means National World must, by no later than 5pm on 1 December 2022, either announce a firm intention to make an offer for Reach or announce that it does not intend to make an offer. This deadline will be extended only with the consent of Reach and the Panel on Takeovers and Mergers, in accordance with the Takeover Code’s rules.

National World emphasised that its announcement does not amount to a firm offer under the Code’s rules, and that there can be no certainty that any offer will be made, nor as to the terms on which any offer might be made. It said it would make a further announcement as and when appropriate.

Headed up by chairman David Montgomery, National World had earlier this year said it was “pursuing acquisition opportunities to build scale and enhance shareholder value”.

The company’s revenue for 2021 was £86m, while its operating profit was £9.3m. The business was established by one-time Mirror Group chief executive Montgomery as a takeover vehicle in 2019. It acquired JPI Media for £10.1m in 2021.

National World’s share price spiked by 32% yesterday afternoon, following the release of its statement, to 26.88p, but had fallen back to 20.25p at the time of writing at lunchtime Friday.

Reach’s share price has been climbing since National World’s announcement, standing at 108.2p at the time of writing, a 12% increase on where it stood shortly before the announcement.

In its results for 2021, Reach’s overall sales rose by 2.6% to £615.8m, with operating profit up 7.6% at £79.3m.