Independent News & Media to snub O’Brien

Independent News & Media is tonight expected formally to reject rebel shareholder Denis O'Brien's plans to refinance the company and sell off its British newspapers.

Today's board meeting was expected to back chief executive Gavin O'Reilly's alternative plan to raise up to 120 million (£110 million) by getting bondholders to swap some of their debt for shares.

INM has to refinance a 200 million bond and sort out 1.1 billion of bank debt, but on Friday it reached a further standstill agreement with its creditors, giving it until the end of October to fund a long-term solution.

O'Brien, who has lost about 500 million on his 26% stake in the company, had proposed injecting 100 million of his own cash into the company, selling off the Independent and Independent on Sunday and blocking the sale of the group's South African poster advertising business. But O'Reilly won backing from bondholders and bankers on Friday for the South African deal, which industry sources said in effect means he has their backing for all the refinancing proposals.

He has also argued that selling or shutting the London newspapers would cost the company at least £35 million in cancelling print contracts. O'Brien has just three seats on the 10-strong board, which also means his chances of winning today's vote are very slim.

He is the company's second-largest shareholder after Tony O'Reilly, the chief executive's father and founder of the business, who holds 28.5%.

O'Brien is still believed to want to go ahead with his extraordinary shareholder meeting in November, at which he will seek to oust several board members and attack O'Reilly Snr's position as president. Gavin O'Reilly's proposals would see bondholders end up owning just under half of the company.