O'Brien continues to build IN&M stake

Shares in Independent News and Media (IN&M) rose by almost 3 per cent yesterday amid reports that entrepreneur Denis O'Brien is continuing to build a stake in the company.

It is understood representatives of Mr O'Brien have purchased some shares through Dublin brokerages in recent days, but the size of Mr O'Brien's current stake is unclear. Yesterday, the businessman declined to comment. Market sources suggested it could range between 4 and 8 per cent. Mr O'Brien would only need to make a public declaration if his stake goes beyond 5 per cent.

There was heavy trading in IN&M shares yesterday, with almost eight million shares traded in Dublin - around four times the average. The shares opened at €2.62, but closed up 2.6 per cent at €2.67.

Business in London was even more brisk, with close to 40 million shares changing hands, compared to a daily average of just over two million.

Earlier in the day, some traders believed two unknown buyers were working in concert, but this was not confirmed at the close of trading. Trading in IN&M has been relatively strong throughout the past fortnight. Market sources said speculation about Mr O'Brien's intentions was one of the contributing factors to the heavy trading.

The position of the US mutual fund Fidelity, a substantial shareholder, was also the focus of market speculation. Some dealers suggested the fund was preparing to reduce its holding.

In January, Mr O'Brien spent nearly € 56.5 million buying a 3 per cent stake in IN&M, the company run and partly-owned by his long-standing business rival, Sir Anthony O'Reilly, who holds a 26 per cent stake. Mr O'Brien acquired 22.6 million shares in the publishing group. In a statement to the Irish Stock Exchange, IN&M confirmed the latest addition to its shareholder register. A spokesman for the company later welcomed Mr O'Brien's investment.

"Independent is one of the best growth prospects of any media organisation," the spokesman said. "It offers a high-dividend yield and recently delivered a strong pre-close trading update. It's not surprising it's attracting interest in that regard."

Mr O'Brien, who became one of the richest men in the State when he netted € 290 million from the sale of his Esat business to British Telecom, has locked horns with Sir Anthony over several high-profile business deals in recent years. Sir Anthony led the Valentia consortium which outbid Mr O'Brien's eIsland group to buy Eircom and subsequently take it private in 2001.

More recently, Eircom, which is still chaired by Sir Anthony following its return to the stock market two years ago, succeeded in its bid to buy Meteor after Mr O'Brien dropped out of the race for the mobile phone operator.

But in 1995, Sir Anthony was on the losing side when the consortium in which he was involved lost out to Mr O'Brien's Esat in the contest to secure the State's second mobile phone licence.