Eircom has said it has received a joint proposal from Babcock & Brown Capital Limited of Australia and the eircom ESOP Trustee Ltd which may or may not lead to an offer for the company.
The approach values eircom at just under €2.4 billion. Under the proposed offer, eircom shareholders would be offered €2.20 per share and a dividend of 5.2 cent per share. It brings the total value of the offer to above €2.25 per share.
Yesterday, Eircom shares closed at €2.14 per share.
Babcock & Brown is the largest shareholder in eircom with 28.8% of the stock while ESOP Trustee Ltd controls just under 22%.
While the announcement had been expected for some time, its timing on a day when stock markets are closed will take many by surprise.
Babcock and Brown has been steadily increasing its stake in eircom since December. The combined Babcock and Brown/ESOT stake amounts to just over 50%.
Today's offer is below the €2.40 offered by Swisscom in its abortive attempt to buy eircom late last year. However its value is still a considerable premium on the €1.55 per share investors paid when eircom listed in 2004.
Babcock and Brown are leading Australian dealmakers and specialists in buying up companies which control important pieces of regional and national infrastructure.
Of crucial interest for those not making a killing from any deal will be the future for eircom given its huge importance nationally in terms of providing fixed line telephone and broadband internet services to the majority of homes and businesses in the country.
Meanwhile, the Communications Workers’ Union has said despite assurances to the contrary it has not been invited to discussions with Babcock & Brown and says it is appalled by what it describes as Babcock & Brown's disingenuous behaviour.
