Belgian media giant Mediahuis closes in on takeover of Belfast Telegraph parent INM
Belgian-Dutch media group Mediahuis moved with extraordinary speed in securing an undisputed position in the driving seat at Independent News & Media (INM) in a matter of just hours.
INM is the Republic's largest independent media company and the publisher of the Irish Independent, Belfast Telegraph and Sunday Life.
At 7am yesterday, INM's board announced to the stock market that they were unanimously recommending a €146m takeover offer from Mediahuis.
By 11.30am, small shareholders at INM's annual general meeting were still reacting to the approach.
The Antwerp-headquartered publisher then announced it had a 27% stake in INM.
It also had binding commitments from the previous largest shareholders, Denis O'Brien and Dermot Desmond, to sell their remaining shares at the agreed price of 10.5 cents per share. Mediahuis chairman Thomas Leysen said he believed his company had put forward a fair price for INM.
INM chief executive Michael Doorly confirmed the board would consider a higher offer if one emerged for the company.
But Mediahuis ended the day controlling a large enough stake to effectively block any rival bid emerging and as INM's biggest shareholder.
The Mediahuis bid was conditional on Denis O'Brien, with 29.88% of shares, and Dermot Desmond, with a 15% stake, providing irrevocable undertakings to support the offer by a deadline of 5pm yesterday.
In the event they each committed to the deal early and had sold a combined 26% stake by 11.30am.
At a briefing for journalists in Dublin, Mediahuis chairman Thomas Leysen said: "I think it's a significant premium to what the company traded at before we came on to the scene."
Mediahuis had factored into its price the potential bill from an ongoing investigation into corporate governance at INM by High Court-appointed inspectors, and a parallel Data Protection Commission probe.
The group - formed in 2013 from a merger of Belgian media businesses - believes in quality, independent media and editorial independence but that can only happen if titles are financially viable, he said. "We are in it for the long haul," he added.
An acquisition of INM will include the Irish Independent, Independent.ie, Sunday Independent, Sunday World, The Herald, Belfast Telegraph and several regional newspapers.
However, at the INM AGM a number of smaller shareholders reacted angrily to the Mediahuis offer price. "You are giving the bloody company away," investor Donald Pratt told INM chairman Murdoch MacLennan and the other members of the board.
Former employee and current shareholder Michael Nolan said a "once great company" was being "sold for buttons".
Shareholder Colm Moore, a private investor, questioned whether the price offered reflected the cash on INM's balance sheet and the value of a €100m unrecognised tax asset resulting from historic losses.
However, Mr MacLennan said the price offered represented a premium of approximately 44% to INM's closing price of 7.28 cents on April 3, 2019.
"We believe this is the best deal for shareholders," he said.
Mediahuis had made the initial approach to INM, he said.
"We didn't put the company up for sale, they came and made a cash offer for the business. We have looked at it very carefully, and it is the best offer we have had," he told shareholders.
Mediahuis's plans for INM will focus on the transition of Irish titles from overwhelmingly print revenue to digital, although executives declined to comment on specific synergies.
In Belgium and the Netherlands, Mediahuis sells 1.4m copies a day of its stable of newspaper titles, but has moved the digital editions of all titles to some form of paid for model.
INM is currently developing a dual commercial model of advertising and subscription for its online titles.
INM shareholders will be circulated details of a proposed scheme of arrangement within 28 days, Mr MacLennan said.
A scheme of arrangement is a mechanism to complete a corporate transaction such as a sale even if not all shareholders agree - it must be signed off by the High Court in Dublin - and in INM's case will mean that if holders of 75% of shares accept the offer, then remaining shareholders can be forced to sell too to ensure a full takeover.
Circulation of that documentation will be followed by an extraordinary general meeting, at a date not yet set. Shareholders can then raise questions about the offer and the sale process, managed for INM by investment bank Lazard and Davy.
Mediahuis CEO Gert Ysebaert said he believed "INM will thrive under Mediahuis's ownership".
"Mediahuis can contribute the relevant experience, skills and resources to invest in INM's brands and significantly enhance its operational and digital capabilities," he said.
Mediahuis operates news brands such as De Standaard, Het Nieuwsblad, Gazet van Antwerpen and Het Belang van Limburg in Belgium and titles in the Netherlands include De Telegraaf, NRC Handelsblad, NRC Next, De Limburger and Noordhollands Dagblad.