Russian tycoon closing in on The Independent

Posted by Leah McBride Mensching on December 18, 2009 at 1:19 PM

Russian billionaire Alexander Lebedev is in advanced talks with Independent News and Media plc to buy both The Independent and The Independent on Sunday, the company announced in a statement today. The exclusive talks "are still preliminary," and "there is no certainty that these discussions will lead to the finalization of a transaction of any kind," the statement from the Dublin-based Independent said.

A former KGB agent, Lebedev bought a controlling stake in London's afternoon paper, the Evening Standard, in January, and it began being distributed for free in October. Lebedev, who made his money in banking and insurance, also owns Novaya Gazeta in Russia, and is part-owner of Aeroflot, a national carrier, according to BusinessWeek.

Photo: Lebedev, PressGazette.co.uk

Lebedev has been in talks with the publisher throughout 2009, but any buyout plans were put on hold as INM restructured its €1.3 billion debt load. Earlier this year, The Independent was reported to be losing more than £10 million a year, according to the Financial Times.

INM CEO Gavin O'Reilly (also president of the World Association of Newspapers and News Publishers, of which Shaping the Future of the Newspaper is part) has previously resisted selling the newspapers, saying they are valuable foreign editorial resources, the Wall Street Journal reported today. However, the talks are expected to be welcomed by Denis O'Brien, an Irish telecom billionaire and the second largest INM shareholder, who has argued in the past that the UK titles should be sold.

INM bondholders approved restructuring plans in November, giving bondholders a 46 percent stake in the group, and reducing O'Brien's stake from 26 percent to 13.8 percent.

The exclusive agreement with Lebedev is set to expire Feb. 15 if no agreement is reached. Should Lebedev buy the titles, it would be an "easy logistical fit," as INM titles already share the same offices as the Evening Standard, The Irish Times pointed out.