* INM to pay 9.25 mln pounds to Lebedev over 10 months
* Lebedev to pay 1 pound to INM
* INM shares rise 12 percent
(Adds details, background, shares)
By Andras Gergely and Georgina Prodhan
DUBLIN/LONDON, March 25 Independent News & Media
(INME.I) agreed to pay Russian billionaire Alexander Lebedev
9.25 million pounds ($14 million) to take on the UK newspaper
the Independent, ending over a year of uncertainty over the
Shares in INM rose 0.01 cents, or 12 percent, as the market
welcomed a deal on Thursday that should enhance earnings for the
Irish media group, while securing a future for the Independent
and its sister paper, the Independent on Sunday.
Closing down the Independent would have cost INM some 30
million pounds, much of it in punitive payments for the early
termination of a printing contract with British newspaper group
Trinity Mirror (TNI.L). A new printing deal has now been agreed.
INM Chief Executive Gavin O'Reilly said the transaction
would make an immediate positive contribution to earnings. He
added that Ivan Fallon, CEO of INM UK, had retired from the
group as a result of the disposal.
Lebedev, an ex-KGB agent who bought the London Evening
Standard last year, said he was committed to investing in the
two titles, which will be owned by Independent Print Limited, a
company controlled by his family. He will pay 1 pound to INM.
He also said that he and ex-Soviet leader Mikhail Gorbachev
planned to establish a not-for-profit media foundation that
would finance global media projects for newspapers including
Novaya Gazeta, a pro-democracy Russian newspaper they co-own.
The Independent, a campaigning, left-leaning newspaper, was
launched in 1986 to challenge established titles the Daily
Telegraph, the Times and the Guardian.
But it never became a mass-market favourite and suffered
disproportionately in the recession that has hit all UK
newspapers. It sells about 184,000 copies per day, the least of
Britain's five quality national dailies.
The deal will raise speculation that Britain might gain its
first free national quality newspaper, after Lebedev turned the
Evening Standard into a freesheet last year.
The parties expect the deal to close in May, following
employee consultation and regulatory approval.
Analysts said the agreement was very favourable for INM,
allowing it to focus on its profitable markets.
"It's a very good deal," said Killian Murphy of Goodbody
Stockbrokers in Dublin. "The group looks an awful lot stronger
without it (the UK Independent). Its operations are now focused
on the island of Ireland, South Africa and Australasia."
(Additional reporting by Barbara Lewis, Editing by Erica