The tough talks and back-stabbing going on in Dublin will doubtless have an effect on Independent News & Media’s South African media assets – and it’s best we get to know the characters of this far-flung boardroom soap opera lest we find ourselves in the same sorry situation as 1995.
That time around, we knew less than a Blarney’s arse about Independent News & Media (INM) chief Tony O’Reilly when he swanned into town for a buying spree except that he had a nice possie in the Bahamas and made a bunch of promises to the ANC.
I suppose we were flattered that a foreigner would show interest in South Africa and he was soon bosom buddies with our then president, Nelson Mandela.
Fifteen years on and we now know that:
a). He bled his newspapers (including The Star, Pretoria News, Sunday Tribune, The Mercury and Cape Times) dry;
b). He didn’t keep one of his promises to the ANC; and
c). Madiba isn’t exactly choosy about who he hangs out when it comes to photo ops.
Today, of course, we have Google alerts so we can follow international news on our BlackBerrys and are, therefore, not so easily wowed by foreign billionaires. One we may well be seeing a lot more of is Tony O’Reilly’s nemesis, Denis O’Brien, the second biggest shareholder in INM.
The Big Two Os have been locked in a bitter battle for control of INM for a couple of years and lately it seems as though O’Brien (hence forth to be addressed as “O the Younger”) has the edge. He managed to oust O the Elder as company CEO this year and get a few friends on to the board. Recently he blocked the sale of the company’s South African outdoor advertising business that was meant to bring in €100m, which would have helped INM settle its €200m debt to bondholders.
O the Elder has hit back at every turn, getting his son, Gavin, into the CEO’s chair and then last week a report from the Irish Times that bondholders were trying to cut O the Younger out of the loop on negotiations on the bond due on August 27.
It does sometimes seem that the captain and his mate are brawling on deck as the ship drifts to the rocks (there’s a €50m bank debt due in September) but something tells me that O the Younger will win this game of chicken.
Last week I requested an interview with O’Brien and was told by his people that he was on holiday but after ferreting around online, I think I can confidently say that O the Younger is a businessman with balls and many would buckle in the face of his colourful, cussing gift for entrepreneurship.
For a 2008 Forbes cover article, O’Brien defined his business strategy as: “Get big fast. [Damn] the cost. Be brave. Go over the cliff. [The competition] doesn’t have the balls.”
O the Younger’s first fortune was made when he won a licence in Ireland to set up a cellphone network and he walked away with £300m by selling it to British Telecom while retaining a 30% stake.
Then he went swashbuckling in the Caribbean and won a string of cellphone licences there, across Central America and South Pacific. His cellphone empire, Digicel, is what has made him one of the world’s richest men. This year’s Forbes’s rich list put him at Number 305 with a net worth of $2.2bn.
O the Younger seems to thrive on risk and has waded merrily into some seriously dodgy countries such as Haiti and Papua New Guinea. His modus operandi in developing countries seems to be to spend millions building cellphone towers while he waits for government approval and then open for business with bravado and bargain basement prices, attracting the masses fast.
In a 2008 Haiti riot, his company stores were the only ones in the capital that weren’t looted out of respect for “the company of the people” and one week after Commodore Frank Bainimarama seized power in Fiji, O’Brien was having tea on the veranda of the new dictator to talk about Digicel.
If INM’s €1.2bn debt sounds terrifying, it’s nothing new for O’Brien. In 2006, he took Digicel’s debt to $2.8bn when he bought out minority investors. He has told Forbes that debt simply produces a more competitively run company.
O’Brien’s antics certainly make for interesting news stories. His mum, a human rights activist, for instance, has harangued him into joining protests against the Russians’ treatment of Chechens outside the Russian Embassy.
He once allegedly boasted about a business associate – while they were jogging together — that he paid a €100 000 bribe to an Irish government official. When this ended up as testimony in a government inquiry, O’Brien brushed it off as bravado, saying the two men often “bullshitted” each other.
The fact that he’s taken on O the Elder shows his outrageous audacity. O’Reilly is regarded as the elder statesman of Irish business. In South African terms, it would be like trashing the good name of the late Anton Rupert.
O the Younger certainly seems to be a hands-on CEO and my guess is that should he trump O’Reilly in the battle for control of INM, he’ll be blustering into South Africa, shaking things up and eyeing out business opportunities beyond the Independent papers.
He surprised many recently in South Africa – myself included -when he declared that South Africa was a “hell of a good media market”.
Though I’m the first to say I would like to see the back of the Irish and the South African papers sold to someone who wants more than a good profit margin, we could do worse than O the Younger. That would be O the Elder.
*Gill Moodie spent 14 years as a salaried hack in print media in South Africa and the UK before escaping to the blogosphere and freelance journalism. She is the publisher of Grubstreet http://grubstreet.co.za/ in between unpacking and packing the infernal dishwasher and bringing up a four-year-old with attitude.