Independent News & Media (IN&M) has stepped up its defence against further stake building by businessman Denis O'Brien with the purchase of €9.1 million worth of its own shares.

In a statement to the stock exchange yesterday, IN&M said it had bought 2.5 million ordinary shares at €3.64 each. It said the shares would be held in treasury, meaning they are not available to be bought by other shareholders.

A spokesman for the company, however, denied that this was the motivation behind the purchase and said it was a function of efficient treasury management.

He said that in November 2007, some cumulative exchangeable preference shares (CEPs) issued in New Zealand back in 2003 will mature and could result in the addition of 50 million new shares to the group's total share capital. (Holders have the option of taking a cash payment of NZ$4 or converting them to IN&M shares.)

The spokesman described the buy back as a prudent measure mindful of the potential dilution impact of the conversion of the CEPS and said the company's actions will benefit of all shareholders.

Yesterday's announcement comes just a day after chief executive Sir Anthony O'Reilly increased his own stake in the company to 27.06 per cent by taking his dividend payment in the form of shares rather than cash.

Given the well-publicised spat between Sir Anthony and Mr O'Brien, the act of turning down a €16 million payment in favour of shares is being viewed in the market as an attempt to prevent Mr O'Brien getting his hands on more stock.

The same could be said of yesterday's announcement because, while buying the shares and holding them in treasury doesn't increase Sir Anthony's stake, it does prevent Mr O'Brien from buying them.