BUSINESSMAN DENIS O’Brien faces a decision on whether to bid for the country’s biggest newspaper publisher after purchasing €3 million worth of shares in the group yesterday.
Mr O’Brien bought 10.8 million shares in Independent News & Media (IN&M), publisher of the Irish Independent and Sunday Independent titles, bringing his total stake in the business to 29.9 per cent.
The purchase, worth €3 million, was the latest round in a feud between Mr O’Brien and the group’s other big shareholders, Tony O’Reilly and his family.
The move heightened speculation that Mr O’Brien intends bidding for the entire group. Stock exchange rules oblige anyone who buys 30 per cent or more of a listed company to bid for the rest of the shares.
Mr O’Brien’s 29.9 per cent stake leaves him just short of this threshold where he has to make an offer to buy out the rest of the company. At yesterday’s closing price of 29 cent a share, this would cost him about €110 million. However, he would have to offer a significant premium to this price to convince other shareholders to sell out.
The Government would have the ultimate say on a sale of the group to the businessman. The purchase would first be referred to the Competition Authority, the State’s mergers watchdog.
If it approved the sale, the body would then have to refer it to the Minister for Jobs, Enterprise and Innovation, Richard Bruton.
Mr Bruton has the power to block a sale to Mr O’Brien on the grounds the Government wants to promote diversity in media ownership. The businessman already controls a number of national and local radio stations.
Earlier this week, Mr O’Brien spent €9.6 million on a 5 per cent stake in IN&M, which brought his holding to 27.9 per cent. The company’s banks, which are owed over €400 million, would have to support the takeover.
Mr O’Brien has spent about €520 million building his stake in the newspaper group since he first began buying its shares in early 2006. His foray into the group has brought him into direct conflict with its other major shareholder, Mr O’Reilly, who owns 14 per cent of IN&M.
Mr O’Reilly and his family’s direct control of the business only ended last month when his son, Gavin, resigned as chief executive.
He left as speculation was growing that Mr O’Brien was planning to oust him at the company’s annual general meeting in five weeks’ time. One of Mr O’Brien’s supporters on the board, financier Paul Connolly, has since taken a High Court case seeking to prevent the company from paying Mr O’Reilly €1.87 million severance. The case is due to be heard in early June.
Last week, a majority of IN&M directors decided to recommend to shareholders at next month’s agm that Mr Connolly be voted off the board for failing to act in the company’s best interests.
Mr O’Brien’s increased stake means that it will now be harder for those directors to get the majority needed to force Mr Connolly off the board.
Neither a spokesman for INM nor a spokesman for Mr O’Brien would comment yesterday.
