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Last Updated:
Apr 24, 2009 - 5:31:05 PM |
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Sir Anthony O’Reilly will resign as CEO in May, on his 73rd birthday. The former Irish rugby international was Ireland's most prominent businessman on the international stage in pre-Celtic Tiger times. He became the first non-American to become CEO of a major US company and The Wall Street Journal has said, that his stint as Heinz CEO from 1979 to 1998 turned a sleepy Pittsburgh company into a food dynamo. |
Sir Anthony O’Reilly has advised the board of Independent News & Media PLC (INM) of his intention to retire as Chief Executive Officer and as a director on 7th May 2009 - his 73rd birthday. Sir Anthony is the largest shareholder (c. 28.5%) and INM says he has has been the strategic driving force behind the company for the past 36 years. Nominees of the second biggest shareholder Denis O'Brien are to join the board.
Gavin O’Reilly, Chief Operating Officer becomes Chief Executive Officer- designate with immediate effect and will succeed Sir Anthony upon his retirement in May. O’Reilly has held his current position for eight years, having joined the group in 1993 and worked in various executive roles.
INM said that consistent with the board’s stated policy of achieving best practice in all matters relating to Corporate Governance, the company also announced certain board retirements and appointments which will result in the Board of INM being reduced in membership from 17 to 10 directors. These changes will take effect progressively over the next three months in advance of the Annual General Meeting which is scheduled for 12th June 2009.
Following these changes, the new 10-member Board will comprise Dr. Brian Hillery (Chairman), Gavin O’Reilly (Chief Executive Officer), Donal Buggy (Chief Financial Officer), and the following non-executive directors, Ken Clarke, Baroness Margaret Jay, Brian Mulroney and Frank Murray. Business associates of Denis O'Brien: Leslie Buckley, Paul Connolly and Lucy Gaffney have been co-opted onto the board with immediate effect.
Denis O'Brien has built up a 25% stake in INM and had called for Tony O'Reilly's resignation and a slimming down of the board..
Over the past year both O'Reilly and O'Brien have lost millions as the share price plunged by 95%.
Commenting on Sir Anthony’s retirement, INM’s Chairman, Dr. Hillery said: “Tony’s retirement marks one of the most remarkable executive careers in Irish history. Tony has been a significant business leader for more than 45 years and has been a key figure in the making of modern Ireland. Tony can be immensely proud that from modest beginnings 36 years ago, he has helped to build a truly global communications business. When Tony first invested in a local Irish newspaper operation back in 1973, it had a turnover of €12m. From that starting point, he immediately applied – with his colleagues – his flair, vision and enormous energy to create a €1.5 billion worldwide communications group.
“Today, thanks to Tony’s talents and efforts and with his collegiate-style of leadership, INM has operations across four continents, 22 countries – and serves over 100 million consumers each and every week. Recognising his unique contribution and as the architect of the Group that we know today, the board has deservedly and unanimously named him President Emeritus.”
Sir Anthony O’Reilly said: “It has been more than three decades since I first became involved with Independent and in that time it has been my pleasure to have worked with a range of highly talented and hugely committed directors and colleagues. My appreciation of them is undiminished by time. Together, we have expanded this Irish newspaper group and enshrined a fiercely independent editorial policy that is widely respected across the world. As the largest shareholder, I will continue to support their legacy and this wonderful Group in the furtherance of its strategy.”
Dr. Hillery added: “At last year’s Annual General Meeting we indicated our intention to reduce the size of the board and so in that regard, I want, on behalf of all of our shareholders, to pay a special tribute to each of the directors who will be retiring or not seeking re-election at the AGM. I also want to welcome Leslie, Paul and Lucy onto the Board; their arrival signals a positive and constructive engagement in the affairs of the Company. I am gratified that Denis O’Brien – our second largest shareholder (c. 26%) – has written to me indicating his support both for these changes to the Board and the Company’s plans to deleverage the business, as announced in our Market Update on January 26th. We are working with Denis towards a common goal in the interests of all shareholders which will enable us to better navigate the uncertainties of the current world economic turmoil and more successfully enhance the Group’s future prospects.”
Commenting on Gavin O’Reilly’s appointment as Chief Executive Officer, Dr. Hillery said: “Gavin has immersed himself in the business since joining the company 16 years ago. He is an important thought-leader in the international media industry as evidenced by his Presidency of the World Association of Newspapers and is focused on further expanding INM’s diverse multi-media platforms. While we face economic conditions which are more challenging than at any time in 60 years and I am comforted by the strength of our individual franchises and by the drive, energy and vision that Gavin will bring to his new role.”
INM announced it will issue its Preliminary 2008 Results on 24th April 2009.
Goodbody analyst Gerry Hennigan commented: "Significantly, the three new appointments to the Board – Leslie Buckley, Paul Connolly and Lucy Gaffney – are all affiliated with Denis O’Brien or his interests. The move clearly signals a greater willingness on the part of the O’Reilly and O’Brien camps to work together in a bid to address the difficulties currently facing the group, the predominant one being group debt (€1.4bn), of which a €200m bond is due in May, with a further €590m in bank debt maturing before the end of 2010, the bulk of which we understand is due for repayment in September 2010. Sir Anthony is the largest shareholder with a stake of c.28.5%, with Denis O’Brien holding a further 26%.
In light of the well publicised difficulties facing IN&M, it would appear that sanity has finally prevailed with the realisation that action is required in the face of a debt burden, slumping advertising revenue across all geographies and falling circulation particularly in the UK. With respect to the latter, we note that management at the UK Independent announced yesterday 14 compulsory redundancies, a week after the NUJ suspended industrial action, though the numbers were less than previously envisaged.
A total of 90 job losses were sought at the UK headquarters, with the process slated for completion before the move to the Associated Newspaper headquarters next month, a move aimed at further reducing costs. The market will no doubt greet the announcement this morning positively, even if the May deadline remains a key near term factor for the share price."
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