Independent News & Media Plc Chief Executive Officer Gavin O’Reilly stepped down, ending four decades of control of the country’s biggest newspaper company by his family, amid pressure from shareholder Denis O’Brien.
“It had become clear that recent and public shareholder tensions were proving an unnecessary distraction for both me and the company,” O’Reilly, who succeeded his father Anthony O’Reilly as chief executive in 2009, said in a statement. “This was not in the best interests of the company.”
O’Reilly stepped down amid tensions with O’Brien, the company’s biggest shareholder, as the company’s shares plunged in the wake of Ireland’s worst recession in its modern history. In 2009, O’Brien said O’Reilly was “incapable” of running the company and six months ago, he called for “a radical overhaul” of the company’s board.
“Denis made a big investment in buying shares in the company, which in retrospect from a financial point of view was a fairly poor investment,” said Gerard Moore, an analyst at Merrion Capital in Dublin before the announcement. “O’Brien’s camp is not shy in expressing its view that change needs to happen and for that to happen the company needs new management.”
Vincent Crowley, chief operating officer, will replace O’Reilly, the company said. O’Reilly’s departure follows a “compromise agreement” approved unanimously by the board, it said.
Independent News has fallen 58 percent in Dublin trading over the last year, giving the company a market value of 134 million euros. Last month, O’Reilly said profit may fall for a second straight year in 2012.
Any attempt by O’Brien, who has a stake of about 22 percent in the company, to take full control of Independent News may raise competition concerns. O’Brien, ranked as Ireland’s wealthiest man in the 2011 Sunday Times Rich List, controls radio stations national radio station Newstalk, as well as other media interests.
Irish Communications Minister Pat Rabbitte said April 13 he is planning laws on media mergers to legislate against the “undesirability of allowing any one individual or undertaking to hold significant interests” within the media industry.