Sir Anthony O'Reilly is to step down as chief executive officer at Independent News & Media in May. He will be replaced by his son Gavin.
The announcement was made in a statement to the Irish Stock Exchange early this morning.
IN&M said that Sir Anthony will retire as CEO and director on May 7th, his 73rd brithday. The group stressed that it was 'entirely' Sir Anthony's decision to step down. It also said that he will remain a shareholder of the company and will take on the role of president emeritus.
Sir Anthony is the firm's biggest shareholder with a 28.5 per cent stake in IN&M. He has been a dominant figure with the group for the past 36 years. However, his grip on the firm has come under relentless challenge from entrepreneur Denis O’Brien, who has built up a 25 per cent stake over the past three years.
An ardent critic of Sir Anthony, Mr O’Brien has previously called on him to retire as chief executive and relentlessly criticised the company, whose share price has collapsed in the past year.
The Irish Timesreported today that Sir Anthony and Mr O'Brien were coming under mounting pressure from Independent News & Media's bankers to cast aside their differences in advance of a looming deadline for repayment of a €200 million bond.
"It has been more than three decades since I first became involved with Independent and in that time it has been my pleasure to have worked with a range of highly talented and hugely committed directors and colleagues," said Sir Anthony O'Reilly in a statement.
"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. As the largest shareholder, I will continue to support their legacy and this wonderful Group in the furtherance of its strategy," he added.
IN&M publishes over 200 newspaper and magazine titles across the world with its main interests in Ireland, the UK, Australia, India, New Zealand and South Africa. It also owns more than 130 radio stations in Australasia.
Gavin O'Reilly, currently the company's chief operating officer, becomes CEO-designated with immediate effect. He has held his current position for eight years, having joined the group in 1993 and has worked in a number of executive roles.
Denis O'Brien, the company's second largest shareholder, this morning welcomed the appointment of Mr O'Reilly.
"I believe these changes represent the beginning of a new era at Independent News & Media and one that brings with it challenges which cannot be underestimated, recognising that IN&M operates an industry which is experiencing rapid change," said Mr O'Brien.
Speaking on RTÉ's Morning Irelandtoday, Gavin O'Reilly described the latest development as a 'win-win' for all IN&M shareholders. He said that his father and Mr O'Brien had found common ground when they met for the first time late last year.
"In meeting (they)recognised that there was far more that united them than divided them and they struck up a purposeful, very friendly relationship and I think that what you are seeing today is a triumph for common sense," said Mr O'Reilly
"From a personal perspective it's very exciting for me to have the very clear endorsement from both the key shareholders," he added.
Independent News & Media also announced this morning that it is to reduce the number of board directors from 17 to 10 and that Leslie Buckley, Paul Connolly and Lucy Gaffney have been co-opted onto the board with immediate effect.
The new board comprises of Dr. Brian Hillery (chairman), Gavin O'Reilly (CEO), Donal Buggy (chief financial officer), and a number of non-executive directors including Ken Clarke, Baroness Margaret Jay, Brian Mulroney, Frank Murray, Leslie Buckley, Paul Connolly and Lucy Gaffney.
The group also announced this morning that it will issue its preliminary 2008 results on 24th April.
Market reaction to today's announcement has been overwhelmingly positive with IN&M shares jumping 81 per cent in early deals.
In its daily briefing, Goodbody Stockbrokers said the reduction in board members addressed past criticism by Mr O'Brien while the three new appointments consisted of people who were affiliated with him.
"The move clearly signals a greater willingness on the part of the O'Reilly and O'Brien camps to work together in a bid to address the difficulties currently facing the group, the predominant one being group debt," it said.
