Eircom board strikes deal with O'Reilly group
Monday, 11 June 2001 23:14
The board of Eircom has struck a deal with the Tony O'Reilly Valentia group for the sale of Eircom. The new offer from Valentia is valued at almost 1.31 euros a share. The board met at 7am today and decided to unanimously recommend the bid to shareholders.
Valentia increased its previous offer after negotiations, which went right through the weekend. Shareholders will now be offered 1.27 euros in cash. However, they will also get a warrant which gives a share in the future profits of the company. After one year, a shareholder can cash in this warrant for four cents a share. After three years, it can be cashed in for seven cents a share. The present value of this offer is almost 1.31 euros a share.
The Denis O'Brien eIsland group also increased its offer to 1.35 euros a share. The staff of Eircom, who owned 15% of the shares, had made it clear they would back the Valentia bid. Their support was crucial in securing the win for Valentia. KPN and Telia, who own 35% of the shares, have said that they will also back the Valentia deal.
