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Denis O'Brien has called for Independent News & Media to hold an extraordinary general meeting (EGM).
He holds a 26% stake in the media group.
O'Brien has proposed resolutions for proposed EGM, including the removal of Brian Hillery from his post as chairman and the ending of annual payments of €300,000 to former executive chairman Sir Anthony O'Reilly in respect of his position as president emeritus of the firm.
The founder of the international mobile phone service group Digicel, also wants INM sell or close the operations of The Independent in London and the Independent on Sunday. He opposes the sale of INM's Outdoor operations in South Africa operations.
Denis O'Brien is also seeking a detailed account of all board member expenses since January 2000 to be prepared by a firm of independent accountants and circulated to all shareholders.
Last week Independent News & Media reported its revenues for the first half of 2009 fell by 22% to €608.8m, while operating profits more than halved to €73.2m. Adjusted earnings per share fell from 7.5 cent a year earlier to 1.4 cent.
Goodbody analyst Gerry Hennigan commented today: "Comments attributed to Denis O’Brien this morning suggest a harder edge to relations within IN&M. While re-iterating his stance that the African Outdoor business, which IN&M agreed in an announcement in Friday to dispose of to Helios for c.€98m, should be retained, and that the UK business should be closed, his call to remove Brian Hillery as Chairman points to tension at Board level. In order to address the first two issues, Denis O’Brien suggests that an EGM should be called to consider both the sale of African Outdoor and the future of the London Independent. The securing of a new debt facility by Johnston Press on Friday would suggest that the banks are willing to provide capital to the newspaper industry, despite the obvious weakness on the advertising front. A lack of agreement at IN&M Board level, however, clearly does not help the re-structuring process or suggest a timely resolution.
Global tax transparency
Davy analyst Stephen Lyons comments: Global tax transparency initiatives may present further opportunities for multinational interest in Ireland - - "Yesterday saw the announcement that Accenture, the multinational management consulting and technology company, had successfully completed its change of incorporation from Bermuda to Ireland. The company's relocation is a positive signal of Ireland's standing worldwide, which may see us benefit from the increased move towards tax transparency that is prompting more multinationals either to set up operations here or commit to pre-existing activities.
The OECD this week published its 2009 report on tax co-operation in which it noted the significant progress being made towards greater transparency and information exchange in the area of taxation. All OECD countries are now compliant with the organisation's article on Exchange of Information. According to the report, over 75 tax information sharing exchange agreements (TIEAs) have been signed since the beginning of 2008. However, with the G20 countries continuing to take a tough line on international low tax financial jurisdictions - - which many multinationals use for tax optimisation - - Ireland stands to benefit from its broader network of tax treaties and, significantly in the case of multinationals, a physical presence in the country.
In explaining its relocation to Ireland, Accenture specifically notes the well-developed corporate, legal and regulatory environment and its 40-year history as an employer and a provider of services in Ireland. This substantial presence adds credibility for the relocation in contrast to Bermuda, where there was no such presence. Accenture notes the continued criticisms of companies incorporated in Bermuda as another factor in the relocation decision. Despite the gains made by the OECD, smaller low tax jurisdictions will continue to attract criticism, presenting Ireland with an opportunity for multinationals looking to incorporate in a low tax base and credibly combining the incorporation with a substantial physical presence."
US manufacturing
Goodbody economist Deirdre Ryan comments: US Manufacturing in expansionary territory - - "The extent of the contraction in manufacturing as the global recession intensified meant that some restocking in inventory levels would be required as economic conditions improved. This has certainly proved to be the case as seen in the ISM Manufacturing Index, released yesterday. For the first time since January 2008, the month after which the US recession is confirmed to have started, the headline index moved above the key 50 mark indicating expansion. The August reading came in at 52.9 (48.9 in July, 44.8 in June), with the headline index having increased consecutively in each of the last eight months since it touched its low point of 32.9 last December.
While the improvement was widespread across the sub indices, we prefer to concentrate on the more forward looking components, in particular the new orders index. This component ticked up to 64.9 in August, and now resides well above its long term average of 54, indicating the strength of the momentum in the industrial sectors at present. The new orders index has proved to be a reliable guide of GDP growth in the past and at its current level is consistent with GDP growth of close to 2% yoy in Q3. Given that GDP was falling at an annual rate of almost 4% in Q2, this is likely overstating the strength of the upturn. It is further evidence nonetheless, that the recession in the US has had its final days, although this is not likely to be confirmed for some time yet."
US auto sales
The Wall Street Journal says boosted by the federal government's "cash for clunkers" program, US auto sales in August surged to their highest monthly total in more than a year, bolstering hopes that the industry's recovery will continue in the months ahead.
Car makers expect a sales dip in September but they are confident the U.S. economy is gradually improving and the broader trend in car sales is positive.
"September will be an aberration," Ken Czubay, vice president of U.S. sales and marketing at Ford Motor Co. said in a conference call. He said Ford is encouraged by positive economic indicators, such as rising home prices and housing starts, and expects that the pace of auto sales in the fourth quarter will be stronger than in the first half.
US markets
In New York Tuesday, stocks dipped on fears that the summer rally may be due for a correction.
The New York Times reported on Monday, that in the US last Friday, the research firm TrimTabs reported that insider selling had grown to $6.1 billion in the month of August through last Thursday, its highest levels since May 2008 - - when the Dow Jones industrial average was floating above 12,000, compared with just over 9,500 at Friday’s close.
The ratio of insider selling to insider buying also soared in August, to about 30 to one, its highest levels since the firm started keeping numbers in 2004.
“You have a classic case of greed stampeding investors into believing that nirvana is at hand,” Charles Biderman, chief executive of TrimTabs, said. “We just don’t see how the market’s going to last.”
On Tuesday, the third consecutive drop in stocks was the longest losing streak in more than two months. The Dow Jones Industrial Average lost185.68 points, or 2%, at 9310.60.
The Standard & Poor's 500 index lost 2.2% and the Nasdaq fell 2%.
The Dow has risen 6.1% in 2009; the S&P is up 10.5% and the technology-tech dominant Nasdaq is up 25%.
Asia
The MSCI Asia Pacific Index fell 1.6% Wednesday - - the Morgan Stanley Capital International All Country Asia Pacific Index, tracks about 960 regional stocks, from the markets in 15 Pacific region countries, including Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Pakistan, the Philippines, Singapore, Sri Lanka, Taiwan and Thailand.
Australia's real gross domestic product (GDP) rose by a seasonally adjusted 0.6% in the second quarter of 2009, the Australian Bureau of Statistics said today. This compared with an unrevised 0.4% in the March quarter and GDP in the 12 months to June, rose 0.6%.
The Nikkei 225 fell 2%; the Shanghai Composite rose 1.2% and Australia's S&P/ASX 200 index dipped 1.7%.
DSG International, Europe's second-biggest electrical goods retailer, today reported a smaller than expected quarterly sales drop and said it had agreed to sell its Polish operations.
The group owns Currys and PC World in Ireland and the UK, Elkjop in the Nordic region and UniEuro in Italy.
It reported sales at stores open at least a year fell 6% in the 16 weeks to August 22, as double-digit percentage falls in UK electricals and computing sales were partly offset by strong sales in Nordic countries.
That followed an 11% decline in the second half of its last financial year
In Europe Wednesday, the Dow Jones Stoxx 600 is down 0.65%.
The ISEQ is off 0.86%.
Davy analyst Ivan Skelly comments on CPL Resources results: Full-year results ahead of expectations - -"For the 12 months to June 2009, CPL has reported profit before tax of €1.7m (Davy estimate: €1.6m), with net cash at year end coming in at €42.5m (Davy forecast: €38.8m).
Net Fee Income (NFI) from the permanent placement business fell by 50% to €12.2m (Davy estimate: €12.6m), while the temporary business generated a gross profit of €22.3m in the same period – a reduction of 20%. Despite these reductions, the group achieved an adjusted operating profit of €8.2m.
The total impairment charge on goodwill and other intangible assets for the period was €8m.
Consultant headcount declined by 35% in the year to 194 at June. We believe that costs will continue to be addressed in a manner so as to maintain profitability and protect cash balances where at all possible.
Management has remained focused on efficient working capital management and as such has not experienced any significant increase in levels of bad or doubtful debts.
In terms of outlook, management continues to expect the demand for recruitment services to remain weak through 2010 and as such is not providing guidance for the year at this stage given the lack of visibility currently in the market.
The strength of CPL's balance sheet is demonstrated by the reported cash balance of €42.5m. This equates to 114c per share."
For live currency updates, check the right-hand column of the Finfacts home page.
The US dollar fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.
Commodities
The Baltic Dry Index, a measure of shipping costs for dry commodities, has fallen 44% since the beginning of June. The index closed up 2 points, at 2,423 on Tuesday.
Bloomberg reports the rate for leasing capesize ships, boats three times the size of the Statue of Liberty, will drop about 50% from the current price of $37,865 a day to as low as $18,000 before the end of the year, according to the median in a Bloomberg survey of six analysts and fund managers. Forward freight agreements traded by brokers show the fourth-quarter average price will be 7% lower.
