A consortium led by entrepreneur Denis O'Brien has launched a second bid for Eircom's fixed-line telephone business, which industry sources said was worth some 2.5 billion euros.
O'Brien, the millionaire founder and former chairman of eircom rival Esat, had seen a 2.25 billion euros by his eIsland group turned down last December because it was too low.
'The offer is in the region of 2.5 billion euros, higher than the previous bid,' a source close to the companies said. But analysts said the bid was still not attractive enough to convince the eircom board. They noted the eIsland consortium now wanted eircom's directory services and Internet companies included in the package.
'It looks like relatively good news but don't forget they are now after Golden pages and other businesses as well,' said Robert Hussey, a telecom analyst at NCB Stockbrokers. 'If you took away the value of Golden Pages, the bid has actually gone down,' he said.
Analysts said eircom's fixed-line operation was a sound investment with a stable subscriber base in most Irish households. Eircom shares were trading down 0.78% at 2.54 euros in mid Dublin trade, valuing the entire group - including Eircell - at around 5.6 billion euros. The stock is down 5.19% in the year to date and 35% since floating at 3.9 euros in 1999. The stock, along with other European telecom shares, was also hit on news of a cut in the offer price for France Telecom's Orange flotation.
Eircom said any eIsland offer would be preconditional on the disposal of its mobile unit Eircell and due diligence by the eIsland consortium. 'Discussions between the parties in relation to this approach are at a preliminary stage and there can be no assurance that these discussions will result in an acceptable, or any, offer for the company,' eircom said in a statement, adding it would seek to maximise shareholder value.
Eircom pulled off the country's largest ever corporate transaction just before Christmas when it agreed to sell Eircell to Britain's Vodafone for 4.5 billion euros.
O'Brien sold Esat to British Telecommunications last year for $2.5 billion after building Esat into Ireland's number two telecoms player during the 1990s. He netted $300 million from the BT deal, but he is again determined to return to a high profile role in the industry where he made his fortune.
He has other colourful ambitions ranging from a pan-Caribbean cellular network to building Irish power plants, telecom investments in the US, the Netherlands and Italy, and a big golfing and holiday complex in Portugal.
