O’Brien increases stake in IN&M

DENIS O’Brien has upped his stake in Independent News & Media to just over 5%.

The telecoms entrepreneur last year spent €52 million of his fortune buying an initial 3% of Independent’s shares.

Independent announced yesterday that Mr O’Brien, who has not commented on his investment in company, owns 38.6 million shares, or 5.06%. Mr O’Brien’s holding in the company is valued at around €120m.

Market sources were puzzled at Mr O’Brien’s decision to add to his stake in Independent.

Shares of the publishing group have had a strong run since Mr O’Brien first announced his was a substantial shareholder in January 2006. Before Mr O’Brien declared his interest Independent shares were changing hands at around €2.70.

One source said it was highly unlikely that Mr O’Brien would mount a bid for Independent given the grip the O’Reilly family has on the company. The source said that it was also unlikely that Mr O’Brien would be allowed to buy parts of the company.

The source added that Mr O’Brien has done well out of Independent so far with the share price growth and a generous dividend and the stake could purely be an investment. Independent News & Media is expecting a double digit rise in earnings this year and will also net in excess of €400m from the sale of its Australian newspaper business, which will allow the company to return cash to shareholders.

A separate source speculated that Mr O’Brien could use to stake to influence coverage of his affairs in Independent titles, though this was rejected by one Independent insider last night.

The purchase of 2% of Independent shares will not put much of hole in Mr O’Brien’s fortune. Mr O’Brien, who is based in Malta for tax purposes, is worth well over €1 billion. Much of his wealth was made in the telecoms business where he netted nearly €300m from the sale of Esat to British Telecom seven years ago.

Tony O’Brien and Mr O’Reilly have clashed several times in the past. Mr O’Brien’s Esat group beat the O’Reilly-backed consortium to net Ireland’s second mobile phone licence.

Mr O’Brien has accused the newspaper tycoon of using his titles to launch “outrageous attacks against me and my company”.