O’Reilly family faces challenge to hold over INM: report

As Independent News and Media prepares to announce its full-year results today, reports emerged last night that the O’Reilly family’s grip on the group could come under pressure.

The Financial Times reported INM’s two largest shareholders, Denis O’Brien and Dermot Desmond, both want the removal of chief executive Gavin O’Reilly.

Mr O’Brien has a 22% stake in INM, while Dermot Desmond has 5.75%.

One source at the group said there would not be much surprise that Mr O’Brien was calling for Mr O’Reilly to be expelled. He made a similar call last November when the group downgraded its full-year profit forecast.

At that point he said he believed “the future of INM is more uncertain than at any time in its history”.

“The first action must be the removal of the chief executive,” he said. “His position is now untenable as he has presided over a near total collapse in shareholder value, and has lost the confidence of investors and the investment community.”

Last year, Mr Desmond, through a representative, told an AGM the destruction of shareholder value at the company since 2007 was “shocking”.

The Financial Times quotes two people “close to the company” as saying the two billionaires want rid of Gavin O’Reilly. It says the move will happen at its June annual meeting. It points out shareholders vote on the board and decisions are based on a majority vote.

Last November, INM forecast its operating profit for 2011 at between €74m and €78m, down from a guidance of €78m-€82m, communicated in August.

Last night INM refused to comment. Mr O’Brien and Mr Desmond were not contactable.