Friday 28 October 2016

Business Week In 60 Seconds: Eircom knocks back €3.3bn Paul O’Donoghue offer as undervaluing firm

Paul O'Donoghue

Published 24/05/2015 | 02:58

The Eircom board rejected a €3.3bn bid for the company
The Eircom board rejected a €3.3bn bid for the company

Eircom caught the market off-guard earlier in the week by announcing that it had rejected a 3.3bn bid for the company - months after the offer was made.

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The company, which abandoned plans to float in the stock market last year, said it has “previously received” a non-binding expression of interest to buy the group for an aggregate price in the range of €3.2bn to €3.3bn.

The bidder was very credible, Eircom said in an announcement to the stock market. However, the board believed that, with the business reaching an “inflection point”, that the indicated offer level undervalued the group.

Vodafone loses 37,000 Irish mobile customers

Despite a pick up in the global market for the telecommunications giant, Vodafone’s Irish business continues to shed customers.

The company lost 37,000 Irish mobile customers in the first three months of the year and 110,000 over the last 12 months, according to its most recent set of financial results.

However, Vodafone, which remains Ireland’s largest mobile player with two million customers and 38pc market share here, gained 7,000 landline customers in the quarter to bring its fixed line customer base to 282,000.

DCC makes biggest ever buy

Shares in Irish distribution group DCC rose over 11pc at one point after it announced that it has agreed to buy French LPG supplier Butagaz from Shell for €464m in what will be the firm’s biggest ever acquisition.

The acquisition of Butagaz marks DCC’s first entry into the French LPG market. Butagaz is the second-biggest operator in the sector there, with a 25pc market share. The acquisition will increase DCC’s earnings before interest and tax by about £54m (€74m)

The company was also buoyed by a strong set of results, operating profit from continuing operations jumped 10.5pc to £221.7m (€308.7m) in the last financial year.

Who’s who of rich investors eye €100m Tallaght plan

Firms linked to property development firm Davy Hickey have joined forces with some of Ireland’s richest people in plans for a major Dublin 400-unit housing scheme in Tallaght that’s likely to cost in the region of €100m to build.

But it will be just the first phase of a massive development that’s being planned on lands controlled by the investors.

The owners of a company behind the scheme, Talarive, are a who’s who of well-heeled Irish corporate and social life. They include Paul Coulson, the executive chairman of glass maker Ardagh, legendary horse trainer Jim Bolger and former head of Davy International David Shubotham.

Banks crack on rates

The country’s banks have all agreed to cut variable-interest rates or offer customers the opportunity to switch to more favourable fixed rates after a very public standoff with the Government.

Minister for Finance Michael Noonan has said the country’s six main mortgage lenders have agreed to reduce payments for variable rate holders by 1 July.

It comes after a series of meetings this week between the minister and bank executives.

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