April 30, 2019 / 6:29 AM / 19 days ago

Mediahuis to buy Irish newspaper group INM for $163 million

DUBLIN (Reuters) - European media group Mediahuis has agreed to buy Ireland’s largest newspaper group, Independent News & Media, for 145.6 million euros (£125.6 million) in its first major deal outside Belgium and the Netherlands.

INM, which owns the Irish Independent and Sunday Independent titles, Ireland’s top selling daily and Sunday newspapers respectively, said on Tuesday its board would unanimously recommend the offer of 10.5 cents per share to its shareholders.

Privately-owned Mediahuis, which sells more than 1.4 million newspapers a day in The Netherlands and Belgium including the De Telegraaf and De Standaard titles, said it saw a big potential in improving the Irish company’s online business.

Mediahuis, which was founded in 2013 and has grown rapidly through acquisitions, has a track record of combining innovative journalism with digital subscription services and paywalls.

“We have the resources and the capabilities to further the digital transformation and enhance the digital capabilities of INM. We think it’s a good match,” Mediahuis chairman Thomas Leysen told Reuters.

Leysen owns 1 percent of INM’s share capital, and expects the deal to close in the third quarter after approval by shareholders, anti-trust authorities, and the Irish government’s Department of Communications.

The offer represents a 44 percent premium to INM’s share price before it announced takeover talks on April 4.

INM’s largest shareholders, Denis O’Brien with 29.88 percent and Dermot Desmond with 15 percent, have provided irrevocable undertakings to support the offer.

Telecoms billionaire O’Brien began building up his stake in 2006 when the then global media empire had a 2.3 billion euros market capitalisation, or as it boasted in its annual report a year later, one “approaching that of The New York Times.”

But weighed down by debts when the financial crisis hit, INM shareholders were diluted by almost 50 percent in a 2009 debt-for-equity swap with lenders, part of a restructuring that included the sale of overseas interests.

In 2013, after O’Brien had rebuilt his stake to just below 30 percent, INM had to strike another deal with its lenders to cut its debt by two thirds.

INM is currently subject to a court-ordered investigation into potentially unlawful conduct at the Dublin-based group, including allegations that journalists’ data might have been accessed for an “improper purpose.”

Asked about the investigation, Leysen said Mediahuis had had the opportunity to do its due diligence.

Editing by Kirsten Donovan and Mark Potter

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