Dermot Desmond increases his stake in INM

WEALTHY FINANCIER Dermot Desmond yesterday increased his stake in Independent News Media to 6.36 per cent from 5.75 per cent previously.

This increases the possibility that INM’s chairman James Osborne could be toppled in a vote on his re-election at its annual meeting tomorrow.

It also increases the likelihood of non-executive director Paul Connolly being re-elected to the board even though most of his fellow directors have recommended to shareholders that they vote him off. Mr Connolly is one of two representatives of Denis O’Brien on the board.

Mr Osborne has put himself in conflict with INM’s largest shareholder Mr O’Brien by recently seeking the resignation of Mr Connolly from INM’s board.

Mr Osborne’s stance follows Mr Connolly’s decision to seek to have a €1.87 million exit package paid to former chief executive Gavin O’Reilly on April 19th declared unlawful by the Commercial Court. In recent weeks Mr O’Brien has increased his stake to just under 30 per cent, the maximum level he can hold without making a bid for the entire company.

This has strengthened Mr Connolly’s chances of re-election.

Mr Desmond is also expected to vote for Mr Connolly.

Mr Desmond has been critical of INM’s strategy since becoming a shareholder.

At last year’s agm he voted in favour of the re-election of Leslie Buckley, a then representative of Mr O’Brien on INM’s board.

However, Mr Buckley was voted off the board.

In March, in a meeting with Mr Osborne, Mr Desmond said he would vote against the re-election of Mr O’Reilly to the board.

Speculation is now mounting that Mr O’Brien will vote against the re-election of Mr Osborne as chairman on Friday.

Mr Desmond would be expected to support Mr O’Brien in this vote.

A majority of votes cast will decide the fate of directors at the agm.

With 60 to 70 per cent of shareholders likely to vote in the elections, this would leave Mr Osborne facing defeat.