Indept News' O'Reilly ready to cede control-report

LONDON, Sept 14 (Reuters) - Anthony O'Reilly is close to agreeing to give up his controlling stake in Independent News & Media (INME.I) in exchange for banks agreeing a rescue plan for the stricken publishing company, the London Times reported.

The firm's lending banks are days from signing up to the deal, which would see bondholders owed $200 million receive some cash plus new shares amounting to around half the equity in a reconstructed IN&M, the newspaper said without naming its sources.

A rights issue would then follow. If he subscribed to the offering, O'Reilly's close-to 30 percent stake would be halved.

IN&M's second largest shareholder, Irish billionaire Denis O'Brien, told the newspaper the rescue plan "blatantly disregards the needs of shareholders".

Bondholders are thought to be sympathetic to the plan, the newspaper said.

A spokesman for IN&M declined to comment.

O'Brien earlier this month ended a six-month truce with the O'Reilly dynasty with a call for an EGM to force a sale or closure of the group's loss-making UK broadsheet titles, halt the sale of its South African advertising business and oust its chairman.[ID:nL2446708]