INM says 'dissident shareholder' is trying to destabilise company

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Independent News & Media yesterday described Denis O'Brien, its second-largest investor, as a "dissident shareholder", accusing him of attempting to destabilise the company.

INM, the owner of The Independent, issued a statement saying that Mr O'Brien, an Irish telecoms tycoon, had "made a series of personalised, misleading and inaccurate attacks on the company, its board, management, strategy and governance". It said Mr O'Brien was "not acting in the best interests of all stakeholders" and warned it would deal with him on this basis in the future.

The statement is INM's first public response to a series of complaints from Mr O'Brien, who first disclosed his stake in the company in 2006 and has continued to buy shares ever since.

Last week, Mr O'Brien, who has criticised INM's corporate governance standards and called on it to dispose of several major assets, raised his stake to just over 22 per cent. Yesterday, INM revealed the contents of a letter sent by Mr O'Brien in 2003 to Gavin O'Reilly, the company's chief operating officer, which it said showed clear evidence of his animosity towards the company. Mr O'Brien told Mr O'Reilly that INM had "spent the last seven years trying to destroy my reputation," and that he was "waiting for the appropriate time to rectify the damage".

INM said it believed Mr O'Brien's anger reflected news stories carried in its Irish newspapers about the Moriarty Tribunal, an independent investigation set up to examine allegations of corruption relating to the award of a mobile phone network licence to the tycoon's telecoms company in the Nineties. However, the company said it had been unable to establish Mr O'Brien's exact motives in building his stake, as he had turned down requests for contact from INM.

The company also said that its latest annual results, published yesterday, showed its strategy of maintaining a portfolio of assets across different media and around the world was continuing to bear fruit. It owns 200 newspapers and magazines worldwide, as well as 130 radio stations and a series of online operations.

Excluding exceptional items, the company's profits rose 7.7 per cent to €286.1m (£225m), marginally ahead of analysts' expectations, with strong performances from its businesses in South Africa, India, Ireland and Australia offsetting slower growth elsewhere. Advertising revenue across the group rose 5.4 per cent last year, with circulation sales up 0.6 per cent. Overall profits before tax fell to €248.4m due to €37.7m of costs related to job reductions, but the company said it believed the measures would save it €18.5m to €20.5m a year within two-and-a-half years.

Sir Anthony O'Reilly, INM's chief executive, said: "Despite the uncertain economic background, we remain confident that, on the basis of current trading in all our geographies, INM can deliver a further year of earnings growth."

Last night, Mr O'Brien denied suggestions that he was attempting to destabilise INM. "It is a highly personal and unwarranted attack on the company's largest independent shareholder and appears to be designed to deflect attention away from the company's disappointing stock performance," he said.

Sir Anthony, INM's largest shareholder, raised his stake in the group by 10 million shares to 27.94 per cent yesterday. Shares in INM rose 8.7 per cent to €1.87.