O'Brien increases stake in Independent at cost of €50m

Entrepreneur Denis O'Brien has spent in the region of €50 million increasing his stake in Independent News & Media (IN&M), the company run by his long-standing business rival Sir Anthony O'Reilly, writes Claire Shoesmith.

In statement to the Irish Stock Exchange yesterday, the company confirmed that Mr O'Brien now holds 38.6 million shares in the media group, equal to 5.06 per cent of its total issued share capital, and up from the 3 per cent he held previously.

At yesterday's closing share price of €3.30, Mr O'Brien's stake was worth more than €127 million.

The announcement follows several days of speculation in the market after IN&M shares were particularly heavily traded on a number of occasions over the past three weeks.

The €50 million value is based on the average share price from the first day of particularly heavy trading this year - January 16th - through to February 6th, the date referred to in Mr O'Brien's declaration to the stock exchange.

Despite buying a significant number of shares in the open market, Mr O'Brien was able to cover his tracks by conducting the business with several different brokerages.

A spokesman for IN&M yesterday declined to comment on individual shareholdings, but said IN&M was a strong-performing stock with consistent returns that paid historically decent dividends.

This purchase follows Mr O'Brien's initial foray into the stock last January when he spent almost €56.5 million buying 22.6 million shares. The reasons for his latest move are unclear, but speculation remains as to whether the businessman may, in the long run, be looking to take over the company, which has significant interests in radio, newspapers and advertising in Australia, New Zealand, South Africa, India and Britain.

But despite having access to considerable funds, it is doubtful whether Mr O'Brien, who is already involved in the media sector through his ownership of Newstalk 106, would succeed in such a takeover. Sir Anthony controls about 28 per cent of the company and is known to have the loyal support of the group's board.

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. Most notably, Sir Anthony led the Valentia consortium which outbid Mr O'Brien's Elsland group to buy Eircom and subsequently take it private in 2001.

In 1995, however, Sir Anthony was on the losing side when the State's second mobile-phone licence went to Mr O'Brien's Esat.