THE parent firm of the Belfast Telegraph and Sunday Life has been sold to a Belgian media company at what some analysts believe is a knockdown price of €145.6 million (about £126 million).
Independent News & Media (INM), Ireland’s largest newspaper group with 800 employees, has agreed to the takeover offer from Mediahuis, a private European media group with a strong portfolio of news media and digital brands.
Founded in 2013, it has grown rapidly through acquisitions to become a leading media player in both Belgium and the Netherlands, where it sells around 1.4 millions newspapers a day and currently employs 3,200 people.
Under the terms of the acquisition - which is still subject to regulatory approval - shareholders are likely to receive 10.5 cents (9p) per share.
But two of INM's two biggest shareholders - Ireland's richest man Dennis O'Brien and Celtic's main backer Dermot Desmond - will retain some interest in the company despite having earlier given what Mediahuis said were "irrevocable undertakings" to sell their entire stock.
In a statement Mediahuis said it has agreed to buy over 360 million shares from O'Brien and Desmond, representing about 26 per cent of the entire share capital of INM.
It said it will buy 17.31 per cent of Denis O'Brien's 29.9 per cent stake in INM while it has also agreed to buy 8.69 per cent of Dermot Desmond's 15 per cent holding.
But both will still have had their fingers burnt in the deal, losing tens of millions of euros on their original investments ( O’Brien will pocket around €20m from the deal, despite having originally shelled out more than €500m buying INM shares to usurp its former owner Tony O’Reilly).
Back in 2001 INM also paid an inflated €490m (about £300m) just to buy the Belfast Telegraph, and 18 years later the entire group is hived off for less than a third of that.
Murdoch MacLennan, previously chief executive of Telegraph Media Group in the UK and now INM's chairman, said he believed the Mediahuis deal represented “an excellent outcome for the company and its shareholders” and fairly reflected the company’s performance and standalone prospects.
The move ends months of speculation about where the troubled INM business (its other titles include the Sunday World, Irish Independent, Sunday Independent and the Herald) would end up.
Suitors were thought to have included Rupert Murdoch’s News Corporation, the London-listed owner of the Daily Mail, Finnish media group Sanoma and German publisher Axel Springer.
Journalists' union the NUJ has welcomed the announcement in that it ends speculation about the future of the company and comes against the backdrop of "boardroom battles and the surveillance of employees" which had undermined the confidence of staff and been damaging to morale.
Union spokesman Séamus Dooley - who has called on the current board and management team to remove the threat of compulsory redundancies in the national and regional titles - said: “This acquisition is of enormous significance.
"The proposed purchaser has a track record of investment in editorial resources and believes unreservedly in independent and quality journalism, so I look forward to discussing their future plans for all platforms and titles, north and south."
Last year profits at INM - which can trace its roots back to 1904 - slumped by 37 per cent to just over €10 million on total sales of €191m, though in the Republic it still accounts for more than half of all daily newspaper sales and about two thirds of the Sunday market.
Mediahuis chief executive Gert Ysebaert said: “We are optimally positioned to facilitate the continued development of INM as a leading Irish media company. We believe that there is a clear rationale for the acquisition and that INM will thrive under our ownership.”
At the company's AGM yesterday a number of shareholders voiced concerns about the nature of the proposed takeover, the price being offered and the move into foreign ownership.
Michael Nolan, who worked for the company for more than 40 years and is now a shareholder, told the meeting: "I have to record my regret that a once great company is being sold for buttons."
