Desmond to replace O’Reilly as second largest INM shareholder

Sir Anthony O'Reilly will be displaced by Dermot Desmond as the second-largest shareholder in Independent News & Media even if he participates fully in its upcoming share placing, it was confirmed last night.

According to the prospectus for the €43 million share sale issued to the stock exchange late yesterday evening, Sir Anthony’s current 13.3 per cent stake will be reduced to just over 7 per cent if he fully subscribes in the one for three share offer. If Sir Anthony chooses not to participate in the placing, his stake will be diluted to about 5.3 per cent.

Denis O’Brien and Dermot Desmond have already given undertakings that will see Mr O’Brien’s status maintained as the largest shareholder on 29.9 per cent, while Mr Desmond will leapfrog Sir Anthony to accrue a stake of 15 per cent.

In order to participate fully in the placing, which INM announced is to be put to shareholders at a meeting on December 16th, Sir Anthony will need to stump up more than €1.7 million to hold his stake at seven per cent.

The company announced yesterday morning that it would issue the new shares at a price of 7c, half its closing price on the stock exchange yesterday.

Mr O’Brien and Mr Desmond have committed to provide €29.6 million of the new capital, with existing shareholders only needing to find €13.4 million for the placing to be fully subscribed.

In a note yesterday, Goodbody analyst Rachel Cairns said she expects it to “be completed successfully”. The placing will raise a net €40 million for the company.

New shares are also being issued to a staff trust, as part of a deal struck to close a hole in INM’s defined benefit pension scheme.