Shares in Independent News & Media (INM) soared on Thursday after the company confirmed it may be sold, having received a takeover approach from an unnamed suitor.

The announcement came after The Irish Times reported that the group’s chief executive, Michael Doorly, had raised the prospect of a sale of the newspaper group in meetings with members of the Dublin investment community in recent days.

Shares in INM soared 24 per cent to 9 cents on the news.

Speculation

“The board of INM notes the recent press speculation and confirms that it has received an approach in relation to a possible offer for the company,” INM said. “Discussions are at a preliminary stage and there is no certainty that any offer will be made, or as to the terms of any such offer.”

Mr Doorly had insisted earlier this week that he was not aware of the intentions of the company’s two biggest shareholders, businessmen Denis O’Brien and Dermot Desmond, who between them control about 45 per cent of the company, according to sources familiar with his comments in meetings.

INM released annual results last week that starkly illustrated the challenges facing the newspaper industry, and it as the sector’s biggest player here.

It announced a more than 2 per cent decline in group revenues to €191 million while pretax profits fell by more than 15 per cent to €24.1 million. Its digital revenues, meanwhile, went into reverse. INM’s cash pile also fell by about 10 per cent to €81.7 million.

The group also announced a new strategy – INM@21 – which includes building a new publishing model to help it “ [optimise] revenues, [reduce] costs and [build ]the capability to respond to the changing needs” of readers. The company said it has set aside €5 million for the first phase of the project.

Results

INM also revealed in last week’s results that it recorded a €3.5 million charge for legal costs last year. The costs were incurred due to investigations by the Office of the Director of Corporate Enforcement and the Data Protection Commissioner, as well as the subsequent appointment of High Court inspectors, after issues including an alleged major data breach at the group in 2014.

INM has been the subject of persistent market rumours in recent months that it could be sold. Sources said German media group Axel Springer had taken a look at INM in the past, while Norwegian group Schibsted has also been rumoured to hold an interest.