Shareholders in Eircom have voted overwhelmingly in favour of a takeover by Australian investment company Babcock and Brown at a shareholder meeting in Dublin. Under the deal, the EIrcom Employees Share Ownership Trust (ESOT) will increase its stake from 22% to 35%.
The deal, which values Eircom at almost €2.4 billion, is the fourth time the company has changed hands in seven years.
The shareholders who have sold out are not members of the public who originally bought shares in 1999, but financial institutions. They invested in the company two years ago and made a profit of 62% today. That compares to a loss of about 25% for the 500,000 who had bought in when the Government sold the company.
Today was Tony O'Reilly's last outing as chairman of Eircom. At the meeting, he robustly rejected widespread criticisms that the company was the main reason why Ireland lags other European states in terms of broadband. He said the issue was highly misunderstood and Eircom had delivered national infrastructure at no cost to the taxpayer.
The purpose of this meeting was to get shareholder approval for the deal agreed by Eircom's board and BCM Holdings Ireland, a group consisting of the or ESOT, and Australian bank Babcock and Brown. This deal was reached early last month and values Eircom at 2.4 billion.
