Call for sale of two INM London titles

ADVISORS to Denis O’Brien have called for Independent News & Media (INM) to sell its loss-making London-based newspaper titles – claiming that they are losing €27 million per year/€75,000 per day.

And they believe the return of the two London titles – The Independent and Independent of Sunday – to profitability is “unrealistic”.

INM has suggested that the London titles could break even within the next 15-18 months, but research prepared for Mr O’Brien (who, with a near 26% stake, is INM’s second largest individual shareholder) claims this is “both unrealistic and untenable”.

That loss figure is close to the previously estimated £30m (€34m), or so, it would cost INM to close the titles down.

Mr O’Brien’s latest communication said that the two London newspapers “should be closed down and INM’s resources directed to more profitable aspects of its business which have a future and can form the basis for a credible equity case, which will be needed to resolve the serious funding issues facing the business”.

Mr O’Brien’s information also suggested that the British Independent titles “risk dragging down several other elements of INM’s business”.

This latest call for the disposal of INM’s London titles follows on from Mr O’Brien’s opposition to the group’s proposed sale of its South African outdoor advertising asset, INM Outdoor – which was recently agreed, although still needs 50.1% shareholder approval.

His latest documentation suggested that the protection of loss-making titles doesn’t seem to be in the best interests of shareholders.

“While selling a profitable division may now be necessary – given INM’s financial situation, it is particularly galling to see profitable businesses such as this being sacrificed, whilst the management continues to protect titles that cannot even make a profit on an operational level,” it said.

INM is due to hold an extraordinary general meeting, before the end of the year, on the South African sale. With regard to the London titles, it maintains that the cost of bringing them to break-even point is less than the cost related to closing them down.