High Court makes directions for INM shareholders meeting

The High Court has made directions for the convening next month of a meeting of Independent News & Media shareholders to consider the proposed €145.6 million acquisition of the group by Belgian media company Mediahuis.

The shareholders meeting will be held on June 26th at the Carlton Dublin Airport hotel and the court will be informed of the outcome on July 4th.

Further directions will be made later.

At the Commercial Court on Monday, Mr Justice Robert Haughton agreed to transfer the proceedings into the fast-track court and approved an application by Brian Kennedy SC, for directions governing the shareholders meeting.

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The proposed acquisition requires the approval of shareholders representing at least 75 per cent of the value of INM’s shares.

Paul Sreenan SC, for Mediahuis, was also in court for the application.

Acquisition

Mr Kennedy said various steps in the proposed acquisition may run into the long court vacation, beginning August 1st. The judge indicated the court would facilitate the matter during the long vacation.

In an affidavit, INM director Michael Doorly said the material concerning the proposed acquisition has been submitted to the Irish Takeover Panel.

Because the relevant announcement was made on April 30th, after which the 28 day period for the relevant material to be sent to INM shareholders begins to run, the matter is urgent, he said.

He said the authorised share capital of the company is €70 million.

He said the INM Board has reached agreement with Mediahuis on the terms of acquisition and the Board has been advised by Lazard & Co Ltd the financial terms are fair and reasonable. The Board believed the proposed acquisition represents the “best option” for the company, its 800 employees, readership, customers, is in the best interests of the company’s shareholders and is not prejudicial to creditors.

Where employees of INM have existing rights, including pension rights, those will be safeguarded following the proposed acquisition becoming effective, he said.

He said INM directors who have provided irrevocable voting undertakings , to vote or procure votes, in favour of the proposed acquisition are himself Karen Marsh, Kieran Mulvey, Seamus Taaffe, Murdoch MacLennan, Fionnuala Duggan, John Bateson, Leonard O’Hagan and Caitriona Mullane.

Capital

Mediahuis has received similar undertakings from other shareholders including Denis O’Brien, who holds about 12.57 per cent of the issued share capital and Dermot Desmond who hold 6.31 per cent of the issued share capital, he said.

The undertakings are subject to the acquisition being approved by the Irish Takeover Panel and the High Court, he said.

Mr Doorly said the INM group faced a number of significant challenges in 2018 which resulted in a decline in overall revenues and profits. That said, the group had a net asset position of €89.7 million in 2018.

In recommending the Mediahuis offer, the Board took into account factors including declining print advertising expenditure and Mediahuis’ track record and experience of digitalising newspaper businesses.

The proposed acquisition represents a significant premium of 44 per cent to the undisturbed share price of 7.28 cent on April 3rd, 2019 and the all-cash consideration gives INM shareholders an opportunity to realise a 70 per cent premium to the company’s volume weighted average share price of about 6.17 per cent over the 90 day trading period ending April 3rd, 2019, he said.

The Board is satisfied the proposed acquisition will not have any impact or bearing on the investigation by inspectors appointed by the High Court concerning the conduct of certain matters at INM, he also said.