Independent News & Media (IN&M) has said resolutions proposed today by Denis O’Brien, one of its largest shareholders, are at variance with previous board decisions.
Mr O’Brien requested an emergency general meeting today and said the company should halt the sale of its South African advertising business, IN&M Outdoor.
IN&M issued a response at lunchtime saying the resolutions proposed by Mr O’Brien were “at variance with decisions previously taken by the board”.
“It is difficult to see how Mr O’Brien’s actions assist in the resolution of the financial restructuring, which the Board believes is in the best interests of the company and its stakeholders,” IN&M said.
With regard to the sale of its South African unit, IN&M said it had entered into a contractually binding agreement to sell the unit in line with a divestment strategy unanimously approved by its board.
Mr O’Brien, who owns about 26 per cent of IN&M and has three representatives on its board, had also called for the removal of Brian Hillery as chairman and the immediate appointment of a new senior independent director.
This afternoon IN&M said the appointment of Mr Hillary, and of independent director Baroness Margaret Jay, had received unanimous board approval.
IN&M also responded to Mr O'Brien's call that the loss-making London Independentand Independent on Sundayshould be sold or closed, saying the group's focus had been on eliminating losses.
Mr O'Brien also said he wanted IN&M to cease annual payments of €300,000 to former chief executive Anthony O'Reilly for his position as President Emeritus of the group.
This afternoon, IN&M said there were no contractual obligations to Mr O’Reilly in relation to his role of President Emeritus and that “no payments have been made to him in this regard”.
It added that Mr O’Brien had "unilaterally chosen to issue a statement this morning in advance of formal consideration of his request by the board of INM, which, as he has already been advised, has already been convened".
Mr O’Brien has also requested a detailed schedule of all board member expenses since January 1st, 2000, to be prepared by independent accountants and circulated to shareholders.
Mr O’Brien’s request for an egm would appear to have ended a six-month truce with the publishing group that followed the retirement of Mr O'Reilly as chief executive.
The group has debts of €1.3 billion and is trying to reach an agreement with bondholders over a €200 million debt that was due to have been paid in May.
Mr O'Brien is the second-largest shareholder in the group, behind the O'Reilly family.
A shareholder with a stake of 10 per cent or more is entitled to call for an egm. From the date of receipt of a valid request the company has 21 days to notify all shareholders with the egm then usually held within two months of the request.
At 4.45pm IN&M shares were down 3.8 per cent at 25 cent. Its shares dropped to 21 cent briefly this morning before recovering. The company's shares are down 40 per cent over the last year.
