SIR ANTHONY O'Reilly's Independent News Media (INM) has concluded a $7.5 million (€4.84 million) deal to enter the media market in Indonesia.

The company has bought a 20 per cent interest in Abdi Bangsa, a listed company with newspaper, billboard, internet and radio interests.

The deal was closed yesterday as businessman Denis O'Brien increased his stake in INM to 23.61 per cent, a holding that has him close to a 25 per cent shareholding that would enable him to block special resolutions from the company.

Abdi Bangsa owns the Republika newspaper and has a stake in Prambos Delta Female, the country's leading radio group. The INM stake is the maximum allowed by Indonesia. INM chief operating officer Gavin O'Reilly will stand for election to the Abdi Bangsa board. The deal is INM's first in Indonesia.

The price values Abdi Bangsa at $37.5 million, double its present market capitalisation. Its share price has fallen 28 per cent this year compared with the Jakarta composite index's 10.75 per cent decline.

Gavin O'Reilly said the price was fair for a company whose 2007 net profit was 330 per cent higher than 2006. "With its large demographics, rising literacy, growing household incomes and rapidly growing services sector, Indonesia is the secret jewel of the Far East," he said.

He said the firm would not seek to interfere with the editorial policy of Republika, Indonesia's most Islamic-oriented national daily. Its daily circulation of 150,000 is one-third that of Kompas, the leading daily.

Mr O'Brien returned to the market this week to buy another 7.8 million INM shares, having increased his stake to 22.67 per cent on Monday. At last night's closing price - €2.21, up 1.51 per cent - the additional shares cost him some €17.23 million.

If he continues to buy shares in the run-up to the firm's annual meeting on June 11th, he will soon cross the 25 per cent threshold.

Because special resolutions require a majority of 75 per cent, such a stake would enable him to block resolutions from the board.

Special resolutions include those which change the company's articles of association or change the number of shares in issue. If he reaches 25 per cent, Mr O'Brien would be able to block the company from buying back its own shares. Resolutions to elect directors, which require a simple majority, are not in that category.

(Additional reporting, Financial Times service)