The Broadcasting Authority of Ireland has decided not to take any immediate action in relation to the media interests of Denis O’Brien.
However, a spokesman said further changes to the board of Independent News & Media, in which Mr O’Brien holds a 29.9 per cent share, may prompt the authority to re-examine the businessman’s holdings in future.
After a meeting to discuss the matter on Monday, the members of the authority, chaired by Bob Collins, decided it was “not obliged” to consider whether Mr O’Brien’s interests represented “an undue amount of communications media”.
The authority concluded that INM’s single largest shareholder does not control the media group and that his holdings only represent a “substantial interest” in the company.
Mr O’Brien has increased his shareholding in INM this year from 22 per cent to a point just below the 30 per cent level where he would be obliged to make an outright bid for the company. In the wake of former chief executive Gavin O’Reilly’s departure, Mr O’Brien also voted against the re-election of two directors, ex-chairman James Osborne and former financial director Donal Buggy.
The events leading up to and including the company’s June agm prompted the authority to write to Mr O’Brien via his radio group Communicorp, asking it to set out its position.
The authority is statutorily obliged to assess “the desirability of allowing any person, or group of persons, to have control of, or substantial interests in, an undue amount of communications media”.
Communicorp currently controls Today FM, Newstalk, Spin 103.8 and 98FM and has a substantial interest in Spin South West and Phantom FM.
“Substantial interest” is defined has having “sufficient proprietary, financial and voting strength” in a company “to be able to influence directly or indirectly to an appreciable extent the strategic direction or policy” of the company.
The authority noted today that Mr O’Brien had not yet reached the 30 per cent shareholding threshold at INM and does not possess 50 per cent of the voting rights exercisable at meetings of INM shareholders.
It also acknowledged, however, that a special resolution cannot be carried at a meeting of shareholders if Mr O’Brien votes against it.
“In its deliberations, the authority considered it noteworthy that Mr O’Brien’s interest in INM has been enhanced, that the situation regarding the company is fluid and that it is intended that further appointments be made to its board,” the authority said in a statement.
It has written to Communicorp to request that “it keeps the authority fully informed of all developments in this regard”.
At present, two of the six directors of INM, Lucy Gaffney and Paul Connolly, are nominees of Mr O’Brien. A spokesman said this did not represent a material change on the position that prevailed prior to Mr O’Reilly’s exit from the group.
“If there were to be further changes in terms of the board, this might be cause for the BAI to look at it again,” he said.
More changes to the INM board are likely, as the company has yet to appoint a replacement chairman.
