Babcock plans float or sale of stake in Eircom - Eircom's new owners, led by Australian fund Babcock & Brown, plan to sell off a stake in the company or float its shares on the stock exchange within the next three to five years, according to a circular on the current €2.36 billion takeover deal to members of Eircom's employee share ownership trust (Esot). The Irish Times says that while the deal will increase the Esot's stake in Eircom to 35%, the trust told its 14,400 members in a circular on the deal that there would be 'more risk' in their investment after the takeover than the risk in their current stock market stake in the company. However, the trust said the tax-free dispersal by June 2009 of €300 million in preference shares in the bid vehicle, BCM Ireland Equity, would compensate for that increased risk. It also said bank guarantees on the preference shares and a reduction in the employee share ownership plan (Esop) loan to €27 million from €105 million would also compensate for the increased risk. There is no detail in the circular about the timing of any sale or flotation, although the document makes it clear that such developments are already on the agenda. While stating that there is no market in ordinary shares in the bid vehicle, the trust cited such a liquidity event as one of four mitigating factors.
New mail chief is in the post for early delivery - The long-awaited decision on the replacement for outgoing An Post chief executive Donal Curtin is expected to end today when a recommendation is made to the mail company's board of directors, writes the Irish Independent. An Post's chairperson Margaret McGinley and non-executive director John Quinliven represented the board on the selection committee. A source close to An Post said yesterday that the selection process has been very thorough and has now concluded. It is understood that John Foley, chief executive of Waterford Crystal, was offered the top job at An Post, but turned it down. There has also been media speculation that David McRedmond, commercial director at Eircom, was considered by the committee.
ITV cuts programme budgets as advertising revenues plunge - ITV moved to dispel the sense of crisis gathering around the broadcaster yesterday, after a first-half marred by declining advertising revenues and an unwanted takeover approach, by handing back a further £200m to shareholders and slashing programme budgets. The Guardian says that the Fitch ratings agency immediately cut ITV's debt to one notch above junk status as it warned the broadcaster that returning cash to investors limited its options in turning round the business. ITV announced the £200m cash return, which puts the total return to shareholders this year at £500m, in a downbeat trading statement that maintains the pressure on the broadcaster's bottom line. Advertising revenues at the ITV1 channel, which accounts for more than two-thirds of ITV revenues, have fallen by an estimated 8% since the start of the year amid general weakness in the advertising market. If current trends continue, ITV1 could lose £180m in advertising revenue this year.
King lashes out at City lawyers - The Bank of England Governor has launched an uncharacteristically fierce attack on City lawyers, saying that the disastrous BCCI case proved that the legal system exists largely for them to make profit, reports the Telegraph. Speaking in front of the Chancellor at the Lord Mayor's Banquet at Mansion House last night, Mervyn King said the system is a 'profitable monopoly' for lawyers. He urged Gordon Brown to overhaul the rules on commercial litigation so that they benefit companies as much as they do their lawyers. His words, delivered to hundreds of the City's top bankers, directors, and indeed lawyers, follow the collapse last year of the £100m court case launched by Deloitte, liquidators of the Bank of Credit and Commerce International.