Telecoms entrepreneur Denis O'Brien is reported to want Independent News & Media (IN&M) to sell its loss-making Independent newspaper in London and review other assets in Australia and South Africa in a bid to boost the company's share price. Ciarán Hancock, Business Affairs Correspondent, reports.
This is thought to be the latest move by Mr O'Brien to put pressure on Sir Anthony O'Reilly, who controls IN&M. Earlier this week Mr O'Brien questioned the standards of corporate governance at IN&M and raised questions about Sir Anthony's remuneration and expenses.
Mr O'Brien's criticisms were rejected by Sir Anthony and other members of the company's board at its annual general meeting in Belfast.
Reports in British newspapers yesterday suggested that Mr O'Brien, who owns 8.35 per cent of IN&M, wants the media group to offload the London-based Independent newspaper.
Sir Anthony took full control of the Independent in 1998. It has been consistently loss-making in the intervening period. The paper is reported to have lost €9 million last year.
Losses peaked at £20 million in 2000 and IN&M spent about £12 million during 2003 and 2004 relaunching it as a tabloid.
The move initially boosted sales of both the daily and Sunday paper but it has surrendered some of the gains since then and has the smallest circulation of all the upmarket dailies in Britain.
Mr O'Brien is also believed to want IN&M to sell its radio assets in Australia and to review its newspaper portfolio in South Africa.
IN&M dismissed the suggestion that it should sell some of its overseas assets. A spokesman said the call displayed an "ignorance" of the "dynamic nature" of the group's activities worldwide. He said the Independent newspaper's losses could be offset in a tax-efficient manner against the profits earned by the Belfast Telegraph in Northern Ireland.
"It is also an extra source of editorial material for all of our titles worldwide and is a very good calling card for the company," he said.
The spokesman said South Africa had proved a good investment for the company and its economy was now much more stable than when IN&M entered the market in 1993.
"If anything we are likely to increase our exposure to Australia rather than reduce it," he added. IN&M is the leading radio operator in Australia and New Zealand.
Mr O'Brien, who owns the Digicel mobile phone network in the Caribbean, has declined to say whether he is interested in making a bid for IN&M.
IN&M's chief operating officer Gavin O'Reilly has claimed that Mr O'Brien's questioning of its governance is designed to drive the company's share price down in advance of a bid by the telecoms billionaire.
Sir Anthony has controlled IN&M since 1973. He owns 26.4 per cent of its equity.
IN&M's shares closed up seven cents at €3.67 on the Dublin stock market yesterday. The company has a market capitalisation of €2.78 billion.
