Problem inserting value with a single quote in MySQL query.

Problem with my query, when adding a value that has a single quote to a database field.

eg. //-- values
        $value1 = "Peter";
        $value2 = "O'Leary";
        $value3 = "Contact Person";
     //-- query
        $stmt = $mysqli->prepare("INSERT INTO table1 (field1, field2, field3) VALUES (?,?,?)");
        $stmt->bind_param('sss',  $value1, $value2, $value3);
        $stmt->execute();
        $newId = $mysqli->insert_id;
        $stmt->close();

This does not insert anything, and $newId has no value.

So it seems I have a really silly question... I'm sure it's something really obvious, but I'm dead tired and can't figure it out.

I've tried...
$value2 = htmlspecialchars("O'Leary", ENT_QUOTES, 'UTF-8');
$value2 = mysqli_real_escape_string($mysqli, "O'Leary");