It is understood that the Eircom Board has asked all interested bidders to submit their final offers for the fixed-line business by tomorrow afternoon. Earlier today, the Denis O'Brien group said that its offer to shareholders had now lapsed, but it remained engaged in the bidding process.
Meanwhile, Eircom shares surged today as the company announced it had received two new approaches from US investment firms, Kohlberg Kravis Roberts, and Blackstone. However, Eircom said that discussions were at a very early stage and there was no assurance the discussions would result in an acceptable offer.
Earlier, the Denis O'Brien-led consortium, eIsland, said that the deadline for its bid for Eircom had expired and it was now up to the Board of Eircom to decide what to do next. The consortium said that they revealed their bid for Eircom had expired because they wanted the process "to come to a head". Earlier, a spokesperson for eIsland said that their offer for the company's fixed line business was off the table and the consortium was considering its position. Two groups have been battling it out for Eircom - eIsland and a Tony O'Reilly group, Valentia.
Denis O'Brien, of eIsland, told RTÉ's News at One that if the Eircom Board wanted to open a dialogue with his consortium, it was entirely up to them. He denied that this move was an attempt to bounce anyone. He said that they had made their first offer nine months ago, and moved in stages up to €1.24 on Friday.
They had added the warrants for shareholders and the staff of 5% of the company because commentators were saying that people should be able to participate into the future. He said that they have been told that the highest offer will succeed. He did not agree that the support of the unions was required, saying that they could get 85% of shareholders' support.
Earlier, the Denis O'Brien consortium revised its offer for the fixed line business. The cash offer remained at €1.24 per share. However, it was understood the consortium would allow existing shareholders to have a small stake in the future of Eircom after it was sold.
The latest offer from eIsland was communicated to the board of Eircom yesterday. It would have given existing shareholders a warrant, which would allow them to participate in any future gains in the company.
The total value of warrants to be given to existing shareholders would not exceed 5% of the value of the company. eIsland also told the employee trust that it could have 25.1% share in the company, a share that would give it voting rights.
The consortium also said that it would make 5% available to staff and management in the form of stock options. It is unclear if this package will be enough to encourage the unions to switch from backing the Tony O'Reilly offer, which gives them 29.9% of the company. The group has bid €1.22 per share. It is expected it will have to increase the offer to at least match the O'Brien bid.
