Gavin O’Reilly has stepped down as chief executive of Independent News & Media, ending 39 years of direct control by his family of Ireland’s largest media group.
He will be succeeded by Vincent Crowley, INM’s chief operating officer, in what the company described as "compromise agreement" approved by the board. Details of the agreement were not disclosed.
A chartered accountant by profession Mr Crowley joined INM from KPMG in 1990.
The decision was announced by INM following a board meeting today.
The move follows weeks of speculation that INM’s largest shareholder Denis O’Brien, who owns 22 per cent of the business, would seek to have Mr O’Reilly removed from his post at the company’s annual meeting in early June.
In 2009, Mr O'Brien said Mr O'Reilly was "incapable" of running the company and six months ago, he called for "a radical overhaul" of the company's board.
Shareholders have been disgruntled by a nearly 58 per cent fall in INM shares in the past year.
Mr O'Brien had been calling for Mr O'Reilly to stand down for much of that time and it had been expected that the chief executive’s role would be put to a vote of shareholders.
Billionaire Dermot Desmond, who raised his stake in the group to 5.75 per cent, from nearly 4 per cent at the start of the year, was also opposed to management.
However, matters came to a head when members of the board met at the company's headquarters in Dublin for two hours, not long after an unknown party snapped up 2 per cent, or around 13 million, of INM’s shares today.
Mr O’Reilly had been chief executive since 2009 following a painful financial restructuring that resulted in his father Sir Anthony O’Reilly relinquishing executive control of the business and seeing his stake diluted to 14 per cent as lenders swapped debt for equity in the business.
“After 19 eventful years with the company, it is time for me to pursue new opportunities,” Mr O’Reilly said.
“It had become clear that recent and public shareholder tensions were proving an unnecessary distraction for both me and the company and this was not in the best interests of the company.
“The board and I agreed that what the company needs now is a board, management team and shareholder base that is purposefully unified and aligned for the company’s immediate challenges and for the many opportunities that exist in the future.
“I leave this great Company with mixed emotions, and I want to particularly thank my work colleagues and friends across Australasia, Ireland, South Africa and the UK, who I have had the great honour and privilege to work alongside.”
"The board and I agreed that what the company needs now is a board, management team and shareholder base that is purposefully unified and aligned for the company's immediate challenges and for the many opportunities that exist in the future."
The O'Reilly family holds approximately 13 per cent of the stock. Sir Tony O’Reilly ran the company from 1973 to 2009, when he was replaced by his son, Gavin.
Tensions between the O’Reilly and O’Brien camps were heightened by the reporting by Independent titles of Mr O’Brien’s appearances with Government Ministers, including Taoiseach Enda Kenny during a visit to the New York Stock Exchange.
A spokesman for Mr O’Brien has said the reporting in the Sunday Independent, was “one of the most concerted and biased campaigns ever waged against any individual in this country”.
A spokesman for Mr O'Brien declined to comment on today’s announcement.
Mr O’Brien holds significant radio interests with more than 40 stations in eight countries and several Dublin-based stations, including TodayFM and Newstalk.
Taoiseach Enda Kenny said the Government would consider “cross-ownership” of the media after an escalation in the battle for control of INM.
The Taoiseach arrived for an event in Belfast shortly after details of the changes were announced.
"Clearly this is a matter that obviously has been brewing for some time. I don’t know all of the details yet, but government in its own way will have a reflection on this in terms of cross-ownership of media," Mr Kenny said.
INM has radically restructured over the past two years, selling flagship British title the Independent and interests in India, shutting the loss-making Sunday Tribune, and swapping debt for equity in a bid to reduce its debts.
The group has net debt of around €430 million and revenues are under pressure in Ireland due to the recession. The publisher issued profit warnings in September and November.
Last month INM posted a pretax loss of €63.6 million for the 2011 and a 9 per cent fall in operating to €75.5 million.
INM shares closed up 6.6 per cent at €0.2430.
Additional reporting: Agencies
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