O'Reilly seeks talks with editor of 'Independent'

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The Independent Online
DR TONY O'Reilly, the Irish financier who emerged last week as holding 24.9 per cent of the shares in Newspaper Publishing, owner of the Independent on Sunday and the Independent, is seeking a meeting with Andreas Whittam Smith, the group's founding editor, in an effort to win him over to his restructuring plans.

So far, Mr Whittam Smith has been hostile to Dr O'Reilly's advances. Mr Whittam Smith is leading his own pounds 55m consortium bid for the company, with backing from Mirror Group Newspapers. The consortium's plans were upset by Dr O'Reilly's share swoop.

Mr Whittam Smith's consortium is backed by Newspaper Publishing's two other largest shareholders, Espresso International Holdings, publisher of Italy's Repubblica newspaper, and Prisa, the publisher of Spain's El Pais newspaper. Between them the two continental shareholders control approximately 37.4 per cent of the group's shares.

'We want to talk to Andreas and we have written inviting him to a meeting with Dr O'Reilly,' said Brendan Hopkins, managing director of international operations at the Irish group. 'We believe he has a lot to contribute.'

Carlo Caraccioli, who leads the Italian partners in the consortium, said last night: 'I personally will certainly meet with the O'Reilly team at the end of this week. We have got to see whether we can cooperate. Obviously, we have to change our plans to take into account the new situation. '

Members of the consortium meet in London today to discuss their options in the wake of Friday's dramatic events, when Dr O'Reilly snapped up shares in Newspaper Publishing as the consortium was announcing the formal terms of its bid approach to the media.

'We're going to reflect on what happened on Friday in the calm light of day and decide what our next step should be,' said Giles Elliott of Schroder, the bank representing the Spanish and Italian shareholders' interests.

The consortium has said that it intends to pursue its offer in spite of Dr O'Reilly's swoop. But yesterday it appeared that some modification to the group's plans, which involve making an offer worth 261p a share to the remaining shareholders, would be necessary. Dr O'Reilly paid 350p.

One adviser to the consortium said Mirror might consider improving the terms of its offer and that he could envisage a scenario whereby the consortium could control the company with 75 per cent of the shares.

But he admitted that Mirror Group Newspapers, which would now not be able to reach the 40 per cent holding it had envisaged before Dr O'Reilly's move, could just walk away.

Mr Hopkins, managing director of international operations at Dr O'Reilly's group, said: 'We spoke to both the Italians and the Spanish on Friday and we are hoping to meet them as early as possible next week. There are a lot of options, but we would prefer to try to persuade them to stay on as shareholders.'

The Irish group has said that it will seek two seats on Newspaper Publishing's board. However, this request looks as if it will meet early resistance from some directors.

The National Union of Journalists chapel (branch) committee, which represents journalists on the Independent and the Independent on Sunday said yesterday: 'The union has always argued for a broad spread of ownership rather than a takeover by an exisiting UK newspaper group.'

(Graphic omitted)

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