Tensions in Independent News & Media over strategy

Chief executive Robert Pitt said to be at odds with chairman Leslie Buckley

INM said CEO Robert Pitt was “fully committed to his role”.  Photograph: Bryan Meade

INM said CEO Robert Pitt was “fully committed to his role”. Photograph: Bryan Meade

 

Serious tensions are understood to have arisen between Robert Pitt, chief executive of Independent News and Media, and some directors including its chairman, Leslie Buckley, over strategy at the publishing group.

The company declined to comment last night when asked detailed questions over the tensions, which according to sources relate to corporate matters such as the time it is taking to make acquisitions.

INM recently made a print acquisition, the Celtic Media regional publisher, but has long been on the hunt for digital assets.

When asked earlier this week to respond to suggestions from sources that Mr Pitt was considering his future, INM said: “The CEO is fully committed to his role.”

Mr Buckley did not respond to text messages and calls querying the source of the tensions. Mr Pitt made no response to a similar email.

At the time of INM’s interim results in August, analysts at stockbroker Davy predicted that “management’s ability to create value from [its €62 million] cash pile would determine the future trajectory of the group”.

Separately, INM could face a legal challenge to its plan to close the company’s defined benefit pension scheme in a move that would slash the pension benefits of active and deferred members.

The National Union of Journalists’ Irish secretary Séamus Dooley said it would consider all options, including legal action, to help protect the position of INM scheme members.

Mr Dooley, who himself is a deferred member of the pension, said the NUJ would be engaging “actuarial advice” for members and that his union would meet with Siptu on Monday to discuss a joint strategy to oppose INM’s plan.

“We don’t see this as done and dusted,” Mr Dooley told The Irish Times.

Trustees

It is understood that the trustees wrote to IN&M this week to express their dissatisfaction at its decision to close the scheme without any advance notice to them.

They noted that members had already taken an average reduction of 40 per cent in their pension promise in a restructuring of the scheme in 2013, and that the latest cut to funding would significantly worsen this position.

INM’s plan would result someone with 40 years service having a 58 per cent reduction in their pension expectation imposed on them with little chance of being able to recover the position.

The trustees have estimated that INM, whose biggest shareholder is Denis O’Brien, would make an exceptional gain on its balance sheet of €24.7 million and make annual savings of €1 million.

It is understood that the trustees could seek to block INM’s proposed capital reduction when the media company goes to the High Court to seek permission for its proposed changes.

These changes will be put to an EGM of shareholders on December 5th, with members of the scheme expected to vent their anger at INM’s plan to close the pension fund, which has operated since 1960.

This capital reduction would allow INM to resume dividend payments. The trustees have told INM that it would be unimaginable that it should consider paying a dividend to shareholders without first resolving the position of the pension fund.

Mr Dooley said it would be an “injustice” if a dividend was paid by INM to its “wealthy shareholders” while pension scheme members were facing substantial cuts in their entitlements.

The trustees want INM to make an additional contribution of €12 million over and above the funding proposal agreed in 2013.

A spokesman for INM said it would be “inappropriate to comment” as the company was engaged in a process with the trustees.