Independent News & Media said yesterday that it had enjoyed a strong fourth quarter and announced plans to pay €25.5 million for a 26 per cent stake in an Indian newspaper publisher.

The group confirmed that it had agreed to acquire a stake in Jagran Prakashan Private Limited, publisher of India's biggest selling daily newspaper.

The deal, which is subject to approval from the Indian government, is expected to be completed early in the new year.

The stake is being bought from the founding Gupta family and will be financed from Independent's existing cash balances. The acquisition is expected to be immediately earnings enhancing.

Jagran, which has an annual turnover of around €100 million, publishes the 62-year old Dainik Jagran Hindi-language daily, which sells nearly two million copies per day. At 16.4 million, it has one of the largest daily readerships of any newspaper worldwide.

"The money will be used to fund future growth, including launches in new markets, and to consolidate our existing operations," said Mr Shailesh Gupta, a director of Jagran.

Meanwhile, Independent said 2004 had been good for the company, and it was confident that it would again show "a meaningful increase in earnings" in 2005.

"A long overdue, yet broad-based and well-diversified positive revenue trend, coupled with extremely good cost management, will generate a strong result for the year 2004, in line with market forecasts," said chief executive Sir Anthony O'Reilly.

The company said it had enjoyed strong sales growth across its major markets in Australia, Ireland, New Zealand, South Africa and Britain, and total revenues were comfortably ahead of last year.

"This strong performance is a combination of good advertising and circulation growth, strong underlying economic performances across all markets, coupled with good cost management," the company stated.

Independent also said advertising revenues remained buoyant and were up more than 10 per cent year-on-year. All advertising, including financial and recruitment, showed an improvement on last year with a notably strong fourth quarter.

Circulation revenues have also been performing well across the group's geographic regions, helped by the launch of its compact editions in Britain and Ireland, and are expected to be up nearly 10 per cent year-on-year.

The company said it had successfully completed an €18.9 million worldwide restructuring plan and savings from this should flow through in 2005 and 2006.

Shares in Independent, which will release its full-year results on March 16th, closed four cent higher at €2.30 yesterday.

(Additional reporting by Reuters)