Denis O’Brien is shaking things up again at Independent News & Media: the company’s second biggest shareholder has called for the immediate sale or closure of the struggling Independent and Independent on Sunday newspapers. So it looks as though the six-month truce that’s been in place since Tony O’Reilly stood down to make way for his son Gavin (largely to appease O’Brien) is well and truly off. And since O’Brien also wants a vote on ending the €300,000 a year payments to O'Reilly senior (now president emeritus), he’s clearly in the mood for a fight with the founding family…
The abolition of O’Reilly’s perks is not O’Brien’s only demand. His latest batch of ‘resolutions’ also call for the resignation of chairman Brian Hillery, and the appointment of a new senior independent director. He’s also demanding that all directors' expenses for the past nine years should be scrutinised by independent accountants, and then circulated to shareholders within three weeks of the meeting – presumably because he thinks something is amiss. Yikes.
Spats between the O’Reilly family and Irish tycoon O’Brien – who owns 26% of INM’s shares, making him the second biggest shareholder – are nothing new. O’Brien’s previous two-year campaign prompted the retirement of Tony O'Reilly as the media group's boss, and although it’s been pretty quiet since, he clearly doesn’t think the new management are doing enough. Gavin will argue that it’s just a matter of time: last week he even said that he expects the Indie to return to break-even by the end of the year (although admittedly that sounds a bit unlikely, given the current state of the market).
On the other hand, INM’s biggest problem is its €1.3bn debt pile, and there seems to have been little progress in addressing that. What’s more, the company’s first-half results showed a 22% drop in revenues, to €609m – so you can see why O’Brien has run out of patience. Many of his resolutions are about cutting costs at the company, which have spiralled out of control in recent years, while he also wants to halt the recently-agreed €98m sale of the group's outdoor poster advertising business in South Africa (he apparently believes the business is more valuable as part of INM, so it’d be better off keeping hold of it). As a successful businessman in his own right, he won’t take too kindly to being fobbed off.
It’ll be interesting to see how the O’Reilly family respond to his latest broadside. But one thing’s for certain: the ceasefire over the Indie is no more. And we can't really imagine that another very public spat is going to do INM's image a lot of good...
In today's bulletin:
Do you trust your boss?
Currys owner cheers City - with 14% fall in UK sales
Sony to bring 3D TV into our front rooms
Key shareholders fall out again over Indie
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