The Dublin-based Independent Newspapers, chaired by Dr O'Reilly, proposes investing pounds 32m to secure a potential 40 per cent stake in the company. As details were released, it emerged that the Telegraph, reportedly out of the frame, was considering a move and a rival bid from a consortium led by Andreas Whittam Smith, founder and editor of the Independent, put its proposals to S G Warburg, bankers for Newspaper Publishing, for buying all the shares not already owned by its members.
Details of the consortium bid, which includes Mirror Group Newspapers and two of Newspaper Publishing's shareholders, the Italian La Repubblica and El Pais of Spain, are not known although it was expected to offer pounds 2 to pounds 3 a share.
Independent Newspapers proposes to subscribe pounds 21m of new money in the form of a non-voting convertible loan stock in Newspaper Publishing. Existing shareholders would have to approve such an issue. The loan stock would be convertible into shares in Newspaper Publishing at the equivalent of pounds 3 a share and, on full conversion, would give Independent Newspapers a 24.99 per cent stake.
Independent Newspapers is also proposing to make a separate pounds 11m tender offer, after the loan stock has been issued, for 20 per cent of Newspaper Publishing's existing share capital at a price of pounds 2.50 a share in cash. The Irish group said it had held discussions with United Newspapers, owners of the Daily Express and Sunday Express, to sub-contract management of certain facilities, understood to include printing and distribution, which would achieve significant
It also said that it was confident it could implement its proposals without having to obtain prior consent from the Government under the provisions covering the take-over of newspapers with combined circulations of more than 300,000.
Dr O'Reilly, who is also a director of the Washington Post, said last night that his group's proposals allowed the Independent titles to maintain the clear perception of independence, in their political and editorial stance and from Newspaper Publishing shareholders, to ensure success. A spokesman for his camp claimed Mirror Group Newspapers would subsume the Independent under the consortium bid.
Dr O'Reilly has said that if the bid fails he may make a full bid for the company, as part of a consortium.
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