Sunday 19 January 2020

Eircom targets €3bn IPO in October as buyers drift away

An IPO for Eircom?
An IPO for Eircom?

Nick Webb & Thomas Molloy

Eircom is likely to power ahead with a €3bn flotation on stockmarkets, as early as October, as interest from trade buyers and private equity players wanes.

US group AT&T is understood to have made a preliminary approach to the company's advisers at an early stage of the process but did not progress with a bid. A number of private equity players including KKR, Apax Partners and CVC are also said to have been sounded out about a deal. Sources at one of Eircom's shareholders told the Sunday Independent that Vodafone and Deutsche Telekom were interested in the group but this has been downplayed by company sources. Eircom is being advised by Rothschild, Goldman Sachs Group and Morgan Stanley, with a strategic review set to be completed before the end of the year.

Unless a late trade or private equity buyer is smoked out soon, Eircom is set to push the button on its third flotation in 15 years. The company has changed hands eight times since being privatised in 1999. Sources have told the Sunday Independent that the telecoms company could list as early as October Eircom is thought to be worth around €3bn and would look to raise €1bn from a flotation, which was earmarked to pay down some of its €2.3bn debt mountain.

The sale of Eircom would generate massive profits for its private equity owners led by Blackstone, which ended up in control of the company following a debt for equity restructuring as it came out of examinership. Other shareholders include Anchorage Capital, Silverpoint Capital and the Bank of New York Mellon-owned Alcentra private equity funds. Chief executive Herb Hribar and chief financial officer Richard Moat may also be in line for a stupendous bonus payout, if they can sell or float the company at a high price. Last week, Eircom reported a yearly loss of €333m as it racked up costs relating to its restructuring program, which have seen staff numbers cut sharply.

Sunday Indo Business

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