INM seeks to stop vote on O'Brien motions ahead of €200m bond deal
THE BATTLE between Independent News Media (INM) and rebel shareholder Denis O’Brien is set to escalate again as the firm nears a deal with banks and bondholders to settle an overdue €200 million bond.
INM’s board is understood to be preparing to refuse to put to a vote three of the eight motions sought by Mr O’Brien at an extraordinary general meeting he has called. The board is also expected to postpone another of Mr O’Brien’s resolutions.
The company wants to postpone the most sensitive of the resolutions, which calls on INM to take no further steps to sell its South African advertising unit, INM Outdoor.
INM is likely to argue that this resolution should properly be put to a later egm at which shareholders will be asked to endorse the sale, which is the centrepiece of its effort to raise funds in order to ease its renegotiation of some €1.3 billion in bank and bond debt.
This resolution is in essence a proxy vote in which investors will be asked to back Mr O’Brien or to back INM chief executive Gavin O’Reilly, head of its negotiation with banks and bondholders.
INM is said to be close to a refinancing deal with banks and bondholders and may be in a position to inform markets of an agreement embracing a debt-for-equity transaction and a discounted rights issue before its latest “standstill” pact with them expires next Friday.
Pending the execution of any deal, however, the standstill would be extended.
INM is likely to argue that the three other resolutions do not properly fall within the ambit of normal egm business.
They include Mr O’Brien’s call on shareholders to cancel a €300,000 annual payment to former chief executive Sir Anthony O’Reilly in respect of his position as president emeritus of the firm. INM, which says he is not entitled under contract to such a payment, will argue that the resolution is moot.
The company’s board, on which Mr O’Brien has minority representation, is also likely to refuse to put a resolution calling on it to stop a €100,000 annual payment to a company owned by non-executive director Brian Mulroney, a former Canadian prime minister.
It is also likely to refuse to put to the egm Mr O’Brien’s call for a detailed schedule of all board member expenses since the start of 2000 to be prepared by a firm of independent accountants and circulated to all shareholders.
There was no comment from Mr O’Brien, who is seeking at the egm to remove company chairman Brian Hillery and to replace senior independent director Baroness Margaret Jay.
He also wants shareholders to vote to close the London Independent newspapers and close the firm’s London executive office.
Mr O’Brien called a second egm, at which shareholders will be asked to vote to block its board from issuing new shares or other securities. INM said in response that investors approved such at its agm in June.
This followed a proposal which the board, including Mr O’Brien’s three representatives, unanimously backed.