INM value surges to €132m on potential bid; Axel Springer understood not to be interested

Shares in Independent News & Media (INM) climbed 30% as the publisher revealed it received a potential takeover approach from an unnamed company, putting it into play at a valuation of almost €132m.

INM value surges to €132m on potential bid; Axel Springer understood not to be interested

Shares in Independent News & Media (INM) climbed 30% as the publisher revealed it received a potential takeover approach from an unnamed company, putting it into play at a valuation of almost €132m.

Speculation has swirled for weeks that a continental European publisher may be interested in acquiring the publisher of the Irish Independent, Sunday Independent, The Herald, and Belfast Telegraph and other regional newspaper and magazine titles.

But market attention has now focussed on the possibility that a private bidder with knowledge of the publishing industry could also be involved, as one European publisher linked to a possible bid is understood not to be interested. Trading activity has been exceptional after millions of shares changed hands over recent days.

Industry watchers said any approach would unlikely have been made if the unnamed company believed it would be blocked by INM’s major shareholders, Denis O’Brien and Dermot Desmond.

The potential offer has put the company in play and raised the possibility that the British publisher may also be tempted to bid, despite the pressures also facing UK publishers.

However, a Norwegian publisher, as well as Germany’s Axel Springer have been mentioned as potential bidders in recent weeks.

But Axel Springer is understood not to be behind the approach and is not interested in acquiring INM. The German publishing giant has been expanding abroad but its interest appears focused on growth in the US. A spokesman for Axel Springer told the Irish Examiner that it doesn't comment on market speculation.

Like the whole industry, INM has been hit by competition for readers from online news and a decline in advertising sales but also faces considerable issues of its own.

INM failed to stop the appointment of inspectors by the Office of the Director of Corporate Enforcement, or ODCE, following rows over corporate governance and major email breaches of its staff. The Data Protection Commission is also investigating the company. A long-time industry observer said the ODCE process could drag on for years and that an offer may help the process be completed more quickly.

Its 2018 results published last week showed INM incurred €3.5m in legal costs linked to the ODCE and Data Commission probes. Pre-tax profits fell to €24.1m, down 15.4% from 2017, but it held €81.7m in cash at year-end.

The surge in its shares has helped the stock to a gain of 5% in the past year, valuing the company at almost €132m. Chairman Murdoch MacLennan said last week that the results beat market expectations. The company was determined to build “a sustainable business for the future and to create shareholder value”, he said,

“The board of INM notes the recent press speculation and confirms that it has received an approach in relation to a possible offer for the company. Discussions are at a preliminary stage and there is no certainty that any offer will be made, or as to the terms of any such offer,” INM said in Thursday’s stock market announcement.

“Shareholders will be kept informed of any relevant developments and, in the meantime, are advised by the board not to take any action. A further announcement will be made in due course,” it said.

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