Today in the press

Thursday 06 March 2014 11.14
A look at some of today's business stories in the newspapers
A look at some of today's business stories in the newspapers

EIRCOM INVESTORS SHARE IN 64M WINDFALL 15 YEARS ON - Hundreds of thousands of small time investors who bought Eircom shares in 1999 are this week sharing in a €64m cash bonanza, writes the Irish Independent. Cheques have starting arriving after many assumed that their investment in the state phone company was worthless. The biggest stock flotation in the country has long been written-off  as a failure - but many are now getting some return on their money. It is hoped that the giant payout will provide a welcome boost to the economy as people will either reinvest or choose to spend their windfall. The sale of Vodafone's US interest to telecoms giant Verizon means about 380,000 shareholders in Ireland are getting either a cheque in the post or money lodged into their bank accounts this week. The total payout in Ireland is estimated to be about €229m, made up of both a cash payout and shares in Verizon. The collective cash payout is estimated to be about €64m. 

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FINANCE SEEKS ADVICE ON BANK SHAREHOLDINGS - The Department of Finance is to tender for corporate advisers to assist it in developing a strategy for the State’s shareholdings in the domestic banks, says the Irish Times. Their first task is likely to involve advising the Government on resolving issues around its preference shares and contingent capital notes (CoCos) in AIB which is 99.8% State-owned. The department is also setting up a panel of between five and seven law firms to draw from for advice on financial issues. To date, it has used three firms it inherited from the National Treasury Management Agency - A&L Goodbody, Arthur Cox and Matheson. A spokesman for the department said it would begin the tender process for law firms in the coming weeks and said the move was in line with “best practice”. AIB’s chief executive David Duffy wants to tidy up the bank’s capital structure in advance of seeking external investors for AIB next year and revealed yesterday that he had held discussions with the department on these matters. “The Department of Finance has agreed to engage with us to resolve the preference shares capital and the conversion of them into equity and to discuss potential options around the CoCos,” Mr Duffy said at a press conference to discuss AIB’s annual results. 

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MOBILE OPERATOR TO ASSIST RIVALS  - Hutchison Whampoa has offered to give network access to several virtual network operators in a bid to win EU approval to buy Telefonica’s Irish unit, according to sources. Hutchison promised to let several mobile virtual network operators to piggyback on its network to commence rival services, said the sources. Concessions by billionaire Li Ka-Shing’s Hutchison are designed to overcome EU objections to the combination of two of Ireland’s four mobile operators, writes the Irish Examiner. Telefonica’s separate plan to merge its German unit with Royal KPN’s E-Plus is another tie-up that is testing how far regulators are willing to allow consolidation in the industry. Joaquin Almunia, the EU’s antitrust chief, has said such deals can’t come at the expense of higher prices for consumers. Hutchison is in talks with Liberty Global Plc’s UPC on providing network access, said the source. Hutchison will also pledge to expand a network-share agreement with Eircom Group that allows both companies to share buildings that host mobile masts and broadcasting equipment. 
 

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IBM WORKERS STRIKE IN CHINA OVER TERMS OF LENOVO TAKEOVER - More than 1,000 workers went on strike at an IBM factory in southern China to object to the terms of their transfer to Lenovo as part of its $2.3 billion acquisition of the US technology group’s x86 server business. Chinese workers are challenging multibillion-dollar deals involving their employers with increasing frequency, injecting an element of risk into large cross-border mergers and acquisitions. Last year, employees at a Cooper Tire factory in eastern Shandong province seized their plant, ejected managers and withheld financial information when the Ohio-based company agreed to be bought out by Apollo Tyres of India. The industrial action helped wreck what would have been the largest Indian acquisition of a US company. One worker, who asked not to be identified, said that protests began on Monday and production remained suspended at the IBM manufacturing facility in Shenzhen, the industrial centre bordering Hong Kong. The factory will be taken over by Lenovo as part of the Chinese company’s planned purchase of IBM’s low-end server business, announced in January.

Keywords: presswatch