Sir Anthony O'Reilly open to offers for The Independent newspaper

Sir Anthony O’Reilly effectively put The Independent up for sale yesterday after saying that he was willing to consider offers for his struggling newspaper, which loses about £10 million a year.

The move comes as the Irish former rugby international battles with €1.4 billion (£1.3 billion) of debt and would mark the end of 11 years in which the London-based title has topped his global newspaper group.

A potential buyer is Alexander Lebedev, the former KGB officer who recently bought the Evening Standard and who knows Simon Kelner, the managing director of Independent News & Media.

The Russian wants a newspaper empire, but has said that the credit crunch has left him short of money.

A statement to the London Stock Exchange, where the Independent’s parent group is listed, said that the company “will also focus on eliminating any loss-making businesses”. The company needs to find €200 million to repay a bond that falls due in May.

Insiders said that “loss-making businesses” refers to The Independent and its Sunday sister title, which have racked up losses year after year since the O’Reilly takeover. The title is ranked fourth in the national daily quality newspaper market, with a daily circulation of 200,000.

A source close to Independent News & Media said: “Does Sir Anthony want to sell The Independent? No. Is it formally for sale? No. But is it fair to say he is open to discussions with potential buyers? Yes he is.”

Denis O’Brien, a rebel shareholder who owns 27 per cent, compared with Sir Anthony’s 29 per cent, welcomed the move, which he has sought for more than a year. Mr O’Brien said that he was “pleased that the board are starting to listen to major shareholder views”.

Sir Anthony had hoped to sell APN, the Australian and New Zealand operation, in which his company has a 39 per cent stake. However, that deal was abandoned yesterday because the credit crunch prevented bidders from raising backing for credible offers.

Independent News & Media’s dividend has also been cut, saving €60 million annually, and some online businesses, including its 49 per cent stake in Verivox, a German price-comparision website, are open for offers.

Operating profits this year will be about €275 million and are expected to decline by 10 per cent in 2009 as advertising revenues tumble.

Sir Anthony spent £74 million buying control of the title in stages, taking full control in 1998.

Dan Sabbagh
The Times
27th January