INDEPENDENT NEWS & Media will seek to extend the maturity of a €600 million debt falling due next year following the public rapprochement between rival investors Denis O’Brien and Sir Anthony O’Reilly, whose 36-year dominance of the firm will end with his retirement in May.
In the face of a collapse in Independent’s share price, years of at times bitter antagonism between the company’s two largest shareholders came to end yesterday. Mr O’Brien’s declared support for the selection of Sir Anthony’s son Gavin as chief executive after his retirement from the post and Independent agreed to the appointment of three directors to represent Mr O’Brien on its board.
The end of the dispute between the two camps follows pressure from Independent’s banks – AIB and Bank of Ireland among them – to cast aside their differences ahead of a looming deadline for repayment of a €200 million bond in May. Independent is now considered unlikely to have the proceeds from asset sales in place before the bond falls due, leading to a likely requirement for bridging finance from banks.
The company’s shares, down more than 94 per cent in the 12 months before the accord between Sir Anthony and Mr O’Brien, rose 67 per cent to 17 cent yesterday. This puts a market capitalisation of €142.67 million on a business with some €1.4 billion in debt.
The appointment of Mr O’Brien’s associates Leslie Buck- ley, Lucy Gaffney and Paul Connolly to the Independent board – where the number of directors has been reduced to 10 from 17 – reflects his stake of some 26 per cent in the business. His shareholding is second to the 28.5 per cent stake held by Sir Anthony, who acquired the business in 1973 and was chief architect of its international expansion.
Although Mr O’Brien relentlessly attacked the company, its board and Sir Anthony’s stewardship of business as he built his position in the past three years, simultaneous announcements from both camps yesterday were marked by a clear change of tone.
“I welcome the changes to the board and the appointment of Gavin O’Reilly as group CEO,” Mr O’Brien said. “I would like to thank Tony O’Reilly for his long-standing contribution to the company. I welcome Tony as president emeritus and also take this opportunity to wish him well on his retirement.”
Gavin O’Reilly, who made withering attacks on Mr O’Brien last year, said yesterday that the confrontation between the two camps was over. “I’m very happy to say it’s water under the bridge. We’ve been working with and talking to Denis and Denis’s colleagues for quite some time now. This is triumph for common sense and in the interest of all shareholders.”
Sir Anthony said it had been his pleasure to have worked with a range of highly talented and hugely committed directors and colleagues at Independent. “My appreciation of them is undiminished by time. Together, we have expanded this Irish newspaper group and enshrined a fiercely independent editorial policy that is widely respected across the world.” Independent chairman Dr Brian Hillery said Sir Anthony’s retirement marked one of the most remarkable executive careers in Irish history. “Tony has been a significant business leader for more than 45 years and has been a key figure in the making of modern Ireland. Tony can be immensely proud that, from modest beginnings 36 years ago, he has helped to build a truly global communications business.
“When Tony first invested in a local Irish newspaper operation back in 1973, it had a turnover of €12 million. From that starting point, he immediately applied – with his colleagues – his flair, vision and enormous energy to create a €1.5 billion worldwide communications group.”
