IN&M sells all buyback shares

INDEPENDENT News and Media has disposed of all shares purchased in its controversial share buyback programme which almost triggered a takeover offer for the owner of the Irish Independent Newspaper.

Independent News & Media plc’s (IN&M) wholly owned subsidiary Independent Newspapers Management Services has sold its entire holding of IN&M treasury shares (11,506,000 ordinary shares) in the market at a price of €1.57 per share, raising €18.1 million.

This follows the sale of 3,068,266 Nil Paid Rights as part of the recent Rights Issue concluded on May 15, 2003, which yielded €1.9 million.

As a result, the total proceeds from the sale of these treasury shares is €20.0 million against a book cost of €18.6 million, resulting in a €1.4m profit for the company.

Commenting on the sale, Goodbody Stockbrokers Neil Clifford said assuming that the company refrains from trading its own shares in the near future, which would be expected if it is to remain committed to its re-capitalisation programme, then we see this as a positive development as it removes a perceived overhang which had been there since before restructuring:

“Additionally, it makes €20m in cash available for other financing purposes, one of which may be to part-fund the upcoming redemption of the group’s €108m preference share issue on June 25.”

The board of IN&M, led by Dr Tony O’Reilly, was severely embarrassed as a result of a public statement by the Irish Takeover Panel (ITP) that it should have made an all-out offer for the company in October, 2002, when it breached shareholding limits. At the time the ITP said:

“As a result of share purchases by the company between June 26 and October 11, 2002, the aggregate shareholding of the directors of Independent (‘the Board’) increased from 29.6% to 30.2%.

"As a consequence of the increase in their aggregate percentage shareholding, the board was under an obligation under Rule 37(a) to make a general offer to all shareholders.”

The ITP said it accepted a submission from IN&M that the breach of the rule was an inadvertent mistake and waived the Rule 37(a) requirement to make an offer for all company shares.