O’Brien may seek legal advice

AS the bitter battle for control of Independent News & Media continues Denis O’Brien has warned he will seek legal advice if, as expected, his €100 million rescue plan for the struggling newspaper group, is rejected.

The board of the group is due to hold a critical meeting today when it is anticipated that it will overwhelmingly reject the offer made last Friday by Mr O’Brien, who presented a €100m rescue plan to group chief executive, Gavin O’Reilly.

Mr O’Brien’s spokesman said a decision has already been taken by Mr O’Reilly to turn down the proposal. Mr O’Brien owns 25% of the group while the O’Reilly family controls over 28% of the group.

IN&M is negotiating the restructuring of a €200m bond with its bankers and has debts of over €1bn.

Mr O’Brien’s spokesman told a newspaper the company “has clearly taken a decision to reject Denis O’Brien’s offer” without supporting that claim.

He claimed it was a decision taken by “the O’Reillys without holding a board meeting”, he said.

“Once again this ignores good corporate governance,” he added.

In a statement last night the group said: “Independent News & Media confirms that its board will meet on Monday [28 September] to review various restructuring proposals.

“This follows the postponement of a planned board meeting last Friday to facilitate a full assessment of the proposals. The board has not made anyfinal determination on any proposal,” the statement concluded.

The O’Brien rescue plan gives him control of IN&M and it would result in a 92% dilution for existing shareholders.

Under the management’s proposed solution shareholders could restrict the dilution to 55% by taking part in a discounted rights issue.