Sir Anthony O’Reilly: The spectacular insolvency of Ireland’s most prominent Celtic Tiger

Ireland’s economic crisis has claimed many victims; none, perhaps, as dazzling as Sir Anthony O’Reilly, the former rugby star who became the first outsider to head Heinz, and built a global newspaper empire. But the downfall of Ireland’s most prominent Celtic Tiger now looks complete, says The Guardian. Last month, O’Reilly found himself in a Dublin court “begging a judge for more time to pay off debts that, in his glorious, glittering past, would have seemed like small beer”. To no avail.

Declared “insolvent” by the court, O’Reilly must now scrape together funds to repay Allied Irish Banks a personal debt of €22.6m. He owes a further €195m to more patient creditors and, with a fire sale of his Irish properties already underway, is contemplating declaring himself bankrupt. “The judgment drew gasps of horror from O’Reilly’s fellow Irish tycoons,” notes the FT. The financier Dermot Desmond slammed AIB “for not showing the same forbearance with its famous debtor” as the government had recently shown to the bank. Mixed in with the sympathy, however, was puzzlement. How had O’Reilly fallen so far, so fast (see below)?

Born in 1936, the son of a civil servant, O’Reilly’s rise was meteoric. “Tall, handsome and self-confident”, he played rugby for Ireland (and later the British Lions), and parlayed his celebrity into a business career. He struck marketing gold with his first big job at the Irish milk marketing board, inventing Kerrygold butter; and, in 1966, was headhunted by the then Taoiseach, Jack Lynch, to run the Irish Sugar Company. That brought him into contact with Heinz, says The Irish Times, where he was hired and rose quickly, becoming CEO in 1979 and chairman a decade later. O’Reilly’s strong work ethic, eye for a deal (Weight Watchers was an inspired purchase) and slick patter “made him a darling of the investment community in the US”.

For O’Reilly, “beans meant money, and lots of it”, says The Guardian. And he invested it in newspapers, acquiring the Irish Independent in 1973 and eventually building a global newspaper chain with 200 titles.

O’Reilly could be haughty, but his generosity was legendary and he entertained lavishly. At his famed “Heinz beanos”, held annually at his beloved Kildare estate, Castlemartin, politicians dined with newspaper hacks, ardent Weight Watchers, long forgotten Welsh rugby players, and the callow undergraduate friends of his children.
He lived “the life of O’Reilly”, said The New Zealand Herald in 2000, once spending $3.84m on a 40-carat diamond ring for his second wife that had previously been given to Jackie Kennedy by Aristotle Onassis. But with even Castlemartin now pledged to creditors, those days are over.

Driven by the need to succeed

Ireland’s implosion in 2008 is associated with property speculators and bankers, says Vincent Boland in the FT. Yet O’Reilly’s fortune was made long before the more extreme versions of the Celtic Tiger roared into life. How then did he come to fall? The answer “has less to do with Ireland, than with the global financial crisis and turmoil in the media industry”. O’Reilly lost big time on two “old economy ventures”: the glass and china-maker Waterford Wedgwood, and Independent Newspapers (INM). As one former associate observed: O’Reilly “could have survived one of these scenarios, but not both”.

It was arguably a combination of vanity and stubborness that did for O’Reilly, says Roy Greenslade in The Guardian. Most of INM’s divisions were profitable, but not enough “to withstand the downturn”. O’Reilly also “misread” his business rival, Denis O’Brien, “who arrived like a cuckoo in the INM nest” and eventually tipped the O’Reilly family out.

O’Reilly wasted around €350m buying shares in INM before its restructure “in a vain attempt to ward off O’Brien”, say Ciaran Hancock and Mark Paul in The Irish Times. But his big bet on Waterford, which he tried to save from receivership in 2009, cost even more. Admirers consider O’Reilly “a patriot”. “He loved Waterford and wanted to save an Irish brand,” says management expert Ivor Kenny. But workers – most of whom forfeited their pensions – tell a different story, blaming the collapse on a litany of “bad decisions”.

O’Reilly isn’t completely on his uppers, says the FT. He has retired to live in France with his wife, a Greek shipping heiress. They also have a property in the Bahamas. He shuns Dublin – and that must hurt. “He needs an audience,” says a former employee. “He’s driven by the need to succeed and have that success recognised. I can’t imagine how he’s dealing with failure.” O’Reilly wasted around €350m buying shares in INM before its restructure

MoneyWeek magazine

Latest issue:

Magazine cover
Prime location

The best property buys in the eurozone

The UK's best-selling financial magazine. Take a FREE trial today.
Claim 4 FREE Issues

Which investment platform?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from. They all offer various fee structures to suit individual investing habits.
Find out which one is best for you.

28 May 1937: the Volkswagen car company is formed  

On this day in 1937, Volkswagen, now the world's second-biggest vehicle-maker, was founded as the 'Society to Prepare the German People's Car'.

The Kids' Portfolio: the four best funds to buy for your children

Investing for your children's long-term future is an excellent idea. But what should you buy? The Kids' Portfolio is a simple collection of four funds intended to be tucked away for 20 to 40 years.