Saturday 21 October 2017

French billionaire emerges as Eir investment suitor

Xavier Niel, billionaire and co-chief operating officer of Iliad; Anne Hidalgo, the mayor of Paris; and Emmanuel Macron, France’s president, at an event in the French capital this summer. Photo: Bloomberg
Xavier Niel, billionaire and co-chief operating officer of Iliad; Anne Hidalgo, the mayor of Paris; and Emmanuel Macron, France’s president, at an event in the French capital this summer. Photo: Bloomberg
John Mulligan

John Mulligan

Talks between Eir's existing shareholders and French telecoms billionaire Xavier Niel are thought to be continuing as he weighs up taking a stake in the former State-owned company.

Mr Niel, an internet and telecoms pioneer in France, is believed to be considering the acquisition of a significant stake in the Irish telco.

Richard Moat, Eir
Richard Moat, Eir

Eir has staged a major turnaround since emerging from what was Ireland's biggest ever examinership in 2012.

Eir confirmed on Thursday that it has been approached by a potential investor.

"The major shareholders of Eircom Holdings SA (EHSA) have informed the board of the issuer that they have been approached by a potential investor who may wish to make a significant investment in EHSA alongside them," it said.

"In so informing the board, the major shareholders have affirmed their continuing commitment to their investment in EHSA for the foreseeable future," it added.

"There can be no certainty that the discussions between the shareholders of EHSA and the potential investor will result in a transaction."

Mr Niel, who controls French telecoms firm Iliad, which operates one of France's largest mobile operators, Free, was named by 'The Irish Times' yesterday as the suitor. Eir declined to comment on the identity of the potential investor.

Mr Niel is also the co-owner of France's 'Le Monde' newspaper. Eir's biggest shareholders are private equity funds Anchorage Capital, with a 42 stake, Davidson Kempner Capital with 14pc, and Singapore's sovereign wealth fund, GIC, which last year acquired a 16.3pc stake.

Last year, Anchorage secured voting control at Eir.

About 24pc of the company is still owned by a mix of finance houses including former lenders. It is not clear if the new investor will offer to mop up those small stakes as part of its approach.

A €1.29bn equity valuation was placed by Eir on the company last year, but shareholders could demand a premium to cede majority control to an outsider. Releasing full-year results this week, Eir said that its earnings before interest, tax, depreciation and amortisation (EBITDA) rose 4pc to €520m in the 12 months to the end of June, while underlying revenue was 1pc higher at €1.32bn.

"An IPO (initial public offering) is always a theoretical possibility, but we're concentrating on improving the operational performance of the business," Eir chief executive Richard Moat, told the Irish Independent this week.

"We made 4pc growth in earnings this year, and we want to continue that kind of level of growth going into the future."

Irish Independent

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