Telecoms and media tycoon Denis O'Brien has increased his stake in Independent News & Media (IN&M) to more than 7 per cent, valuing his share in long-standing rival Sir Anthony O'Reilly's media company at more than €200 million.

The announcement, which was made to the Irish Stock Exchange late yesterday afternoon, confirmed rumours circulating in the Irish market for some time.

Mr O'Brien has made no secret of the fact he wants to increase his stake in the company, which previously stood at 5.1 per cent, with some commentators saying he was seeking to take control of as much as 10 per cent of the media group. This would make him the single biggest shareholder after Sir Anthony.

Shares in IN&M yesterday rose 2.2 per cent, or eight cent, to close at €3.75, though volume was light compared to recent days. Dealers expressed some surprise at the gains, saying that it had been well-flagged that Mr O'Brien was buying up shares and, as a result, they would not have expected the announcement to affect the share price.

In the statement Mr O'Brien said he now holds 55.8 million shares in IN&M, equal to 7.28 per cent of the issued share capital.

It is unclear exactly when he bought the extra 2 per cent of the company but the additional shares are likely to have cost him in the region of €60 million. He previously paid €56.5 million for an initial 3 per cent interest in the company in early 2006 and a further €50 million to increase that to just over 5 per cent in January and February of this year.

The reasons for Mr O'Brien's latest move are unclear, but speculation remains as to whether the businessman may, in the long run, be looking to take over IN&M, which has significant interests in radio, newspapers and advertising in Australia, New Zealand, South Africa, India, Britain and Ireland.

This rumour has been further fuelled by talk that Sir Anthony, who controls 28 per cent of the company, may step down this year after IN&M completes the €1.93 billion leveraged buyout of Australian media player APN. That acquisition is due to be approved by shareholders on May 18th.