More IN&M shares likely to come on open market

MORE THAN six million shares in Independent News & Media (IN&M) are likely to come on the open market in a fortnight's time when its stock is removed from a Dow Jones index which tracks dividend-paying companies in international markets.

As "dissident" investor Denis O'Brien notified the market yesterday that his stake in IN&M now exceeds 20 per cent, it emerged that the company will leave the Dow Jones STOXX Global Select Dividend 100 Index with effect from March 25th.

A spokeswoman in Frankfurt for Dow Jones was unable last night to explain why IN&M had been dropped. Asset managers who invest in IN&M due to its membership of this index hold 6.5 million shares in the business, the company said.

It is far from certain that such "index investors" will sell their stake in the IN&M when the index is reconfigured, but passive asset managers typically copy all movements on the index they follow.

This opens up the prospect that shares making up more than 0.8 per cent of the company will become available at a time when Mr O'Brien is again in the market for IN&M stock.

Shares in IN&M declined 2.18 per cent to €1.792 last night, a level that implies a market capitalisation of €1.41 billion. The current price is less than half the level of €3.80 around which Mr O'Brien bought stock last June.

Having returned to the market late last week after an absence of a month, Mr O'Brien raised his shareholding in the group to 20.16 per cent from the level of 19.35 per cent declared last Thursday. IN&M declined to comment.

Mr O'Brien has never declared his ultimate intentions for his investment in IN&M, but he has attacked Sir Anthony O'Reilly's stewardship of the company and its overall strategy. IN&M has rejected Mr O'Brien's attacks.

The latest share-buying brings him closer to the level of 25 per cent at which he can block certain resolutions put to shareholders. He is considered likely to continue building his stake, but it is unclear whether he will breach the threshold by the IN&M's agm this summer or deploy such a stake to block management resolutions.

Contrary to a report last Friday, Mr O'Brien crossed the threshold at which he can block any bid for the business from a rival when his stake exceeded 10 per cent. This reflects a change in EU takeover regulations in May 2006, which entitled shareholders with 90 per cent of a fully-listed firm to buy out all other investors.