Eircom is to be sold to the Australian investment Group Babcock & Brown in a deal worth €2.4 billion. The Employee Share Ownership Trust, which represents workers at the company, will remain a minority shareholder.
A statement this morning said Eircom and BCM Ireland Holdings, which is a company formed for the purposes of the offer, had reached agreement on the offer.
This morning's announcement will pave the way for yet another change of ownership at Eircom, the former state owned Telecom Eireann which was first floated on the stock market in 1999. The company was then taken private before returning to the stock market in 2004.
Eircom shareholders will receive €2.20 per share in cash plus a second interim dividend of 5.2 cent. After the offer, Babcock & Brown will own 65% of Eircom, while the ESOT will have 35%, up from its current level of just over 20%.
Pierre Danon will become chairman of Eircom, while Con Scanlon remains deputy chairman.
Eircom chairman Dr Tony O'Reilly said the company's independent directors, which exclude the ESOT representatives, would unanimously recommend that shareholders back the deal. He said the directors believed the offer was fair and reasonable.
Speaking to RTE radio this morning, Mr Danon said Babcock & Brown was taking on €3.8 billion in debt for the acquisition, though this included existing Eircom debt. On broadband coverage, he said there were challenges, but he was committed to working with the Government, the regulator and the industry to improve the situation.
Mr Danon said the new owners intended to start as an integrated company, but would listen to any arguments from Government or the regulator for a split of the retail and network business.
Eircom shares closed five cent higher at €2.20 in Dublin this evening.
