CEO of Independent News and Media to retire
March 13, 2009
London - Tony O'Reilly has announced that he is to retire as chief executive of Independent News and Media in a board shakeup which may end a lengthy feud among major shareholders and caused the shares to skyrocket.
Mobile telecoms tycoon Denis O'Brien - ranked as the richest Irishman in the Forbes billionaires list and owner of 26 percent of Independent News and Media - has long waged a public campaign against O'Reilly, who owns a 28.6 percent stake and is the largest shareholder.
On Friday three allies of O'Brien were placed on the Irish company's board, which has been reduced from 17 members to 10, further diminishing O'Reilly's power.
Analysts say the departure of O'Reilly was probably at the behest of the company's creditors, who thought the endless feuding was a distraction from the company's key immediate challenge - repaying a €200&nbsop;million (R2.57 billion at Friday's exchange rate) bond in the next few months.
Investors welcomed the shakeup, bidding shares up 43 percent to €0.15 on the London Stock Exchange. The company's shares had fallen from a recent peak of €2.30 at the end of May 2008 to €0.10 on Thursday.
O'Reilly's son Gavin, currently chief operating officer, will become chief executive when the elder O'Reilly steps down on May 7, his 73rd birthday - ending nearly 36 years on the board of Ireland's dominant media company.
The elder O'Reilly and his two other sons, Tony Jr and Cameron, will not be part of the new board.
O'Brien said: "I believe these changes represent the beginning of a new era at Independent News and Media and one that brings with it challenges which cannot be underestimated, recognising that the conpany operates an industry which is experiencing rapid change."
Independent News and Media has interests in 22 countries, publishes more than 200 newspapers and magazines including The Independent in Britain, the Belfast Telegraph group in Northern Ireland, 17 daily and weekly newspapers in South Africa, and holds about 40 percent of APN News and Media in Australia.
O'Reilly was dropped from Forbes' latest list after years of being among Ireland's top five; he will hold an honorary position of "president emeritus" after stepping down.
A former chairman, president and chief executive officer of HJ Heinz and former chairman of Waterford Wedgwood, O'Reilly invested more than €200 million in Waterford Wedgwood in the past six years but the company filed for bankruptcy protection in January 2009 after failing to find a buyer.
O'Brien is the founder of Bermuda-based Digicel Group, which operates in 31 markets, mostly in the Caribbean and Central America.
In a January 26 market update, Independent News and Media called the collapse of its share price "unwarranted".
If advertising and credit markets don't get any worse, the company projects an operating profit of €240-270&mnsp;million (R3.47 billion) in 2009.
It said said staff in Ireland had accepted pay cuts, executive pay had been trimmed by 10 percent and no bonuses were planned for 2009; it also said it intended to dispose of some assets but did not identify them. - Sapa-AP
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