Minister for Enterprise Micheál Martin has given formal approval to the €200 million takeover of national radio station Today FM by Denis O'Brien, the billionaire tycoon who yesterday increased his stake in Independent News & Media (IN&M) to more than 16 per cent. Arthur Beesley, Senior Business Correspondent, reports.

Mr Martin's office said the Minister issued a letter last Friday in which he upheld the ruling of the Competition Authority on the Today FM deal. Political approval of the deal means that the transaction, agreed last July, has crossed the final hurdle after two regulatory examinations.

In a decision that mirrored an earlier ruling from the Broadcasting Commission of Ireland, the Competition Authority allowed Mr O'Brien to buy Today FM from British group Emap on condition that he dispose of its sister station FM104. UTV is buying FM104, a Dublin music station, for €52 million.

Mr O'Brien plans to sell Today FM's other sister station, Highland Radio in Co Donegal. Highland could fetch €10-€12 million.

Mr O'Brien increased his stake in IN&M to 15.36 per cent last Thursday from 14.5 per cent, although the market was not notified until Tuesday.

Mr O'Brien returned to the market on Tuesday, buying more than 8.4 million IN&M shares. This purchase, which cost some €20 million, brought his stake in the group led by Sir Anthony O'Reilly to 16.43 per cent.

He has been increasing his IN&M stake for about a year, sweeping up shares as he attacked the group's governance, its board and its strategy.

Although he has never said it himself, Mr O'Brien is widely assumed to be preparing the ground for a bid for IN&M at some point in the future.