INM’s shares soar as it confirms talks with potential buyer

Newspaper group’s stock closes 30.5% up at 9.5 cent, valuing it at €131.7m

Shares in Independent News & Media (INM) soared 30.5 per cent on Thursday as it confirmed it may be taken over following an approach from an unnamed party.

The company issued a stock exchange announcement after The Irish Times reported that its chief executive, Michael Doorly, had raised the prospect of a sale of the newspaper group in meetings with members of the Dublin investment community earlier this week.

“The board of INM notes the recent press speculation and confirms that it has received an approach in relation to a possible offer for the company,” INM said. “Discussions are at a preliminary stage and there is no certainty that any offer will be made, or as to the terms of any such offer.”

It is understood the approach is being treated as a serious buyout proposal by INM’s board. The stock closed almost a third higher at 9.5 cents, valuing the group at €131.7 million.

Recent market speculation on possible suitors for INM has included German media group Axel Springer, which is said to have looked at it in the past, as well as Norway's Schibsted and the London-listed owner of the Daily Mail.

However, sources have told The Irish Times that none of these companies are behind the current bid referred to in INM’s statement. Spokesmen for all three declined to comment.

Identity of buyer

Finnish media group Sanoma, with which INM executives are believed to have been in contact to advance their plans to introduce a paywall model, has most recently been identified as potential buyer.

A spokeswoman for the Helsinki-based company declined to comment. She said the group’s strategy is currently focused on media interests in Finland and the Netherlands, and on providing learning solutions for schools in five markets. These comprise Finland, Poland, Belgium, the Netherlands and Sweden.

Schibsted already has significant Irish interests. It bought the classifieds website Done Deal, before merging its operation with the owner of and property website, founded by brothers Brian and Eamonn Fallon.

Although Schibsted is not believed to be the current suitor, it has been persistently linked with INM for over a year and sources speculated on whether Thursday’s announcement could tempt it into the fray.

A spokesman for INM declined to comment on the interested party. “Shareholders will be kept informed of any relevant developments and, in the meantime, are advised by the board not to take any action,” the company said in a statement.

Biggest shareholders

In meetings with members of Dublin's investment community, Mr Doorly insisted earlier this week that he was not aware of the intentions of INM's two biggest shareholders, businessmen Denis O'Brien and Dermot Desmond, according to sources familiar with his comments.

The two businessmen control about 45 per cent of INM between them, and their respective imprimatur would be essential for any suitor to launch a serious bid. Representatives for both men didn’t respond to requests for comment.

On Thursday morning, analysts at Davy, a corporate broker to INM, issued a note to clients raising their 2019 revenue forecast for the group to €181.3 million from €174 million. This would represent a 5 per cent decline on last year’s result.

“INM’s management is confident in implementing its new strategic plan entitled INM@21,” said Davy. “This plan will increasingly see INM look to monetise its digital audience, with the company already committing €5 million in the first phase of the plan.”

While Mr Doorly had outlined a year ago that he planned to introduce a subscriptions paywall on its news sites, the company said last week that it may be the first quarter of next year before this is in place.