Business Irish

Wednesday 13 December 2017

Valentia set to match eIsland's euro 1.36 bid for Eircom


VALENTIA, the consortium led by Sir Anthony O'Reilly, is expected to make a new bid for Eircom this week. Sources close to the consortium say a fresh offer could come as early as Tuesday.

Valentia is believed to be planning, at the least, to match the 1.36 per share bid already made by Denis O'Brien's eIsland group.

This will ensure that they secure the continued support of the 35 per cent stakeholders in Eircom the Comsource Group made up of the Dutch telecom company KPN (21 per cent) and Telia of Sweden (14 per cent).

If Valentia makes a fresh bid, it will again be looking for a recommendation from the Eircom board; currently the board is supporting the eIsland approach as the highest cash offer, but is widely expected to switch to Valentia as the only executable deal if it comes in at 1.36 or higher. Valentia still enjoys the full support of the 15 per cent shareholder, the Employee Share Ownership Trust (ESOT).

It is widely anticipated that institutional shareholders and small private investors will accept a Valentia bid if it matches or exceeds eIsland's 1.36 price.

A frenzied series of meetings between advisers to all parties in the battle is taking place over this weekend. Particular attention is being paid to the position of the Comsource group. Valentia is thought to be intent on reaching an irrevocable deal with Comsource, which would bring the takeover battle to a swift conclusion. The first bid took place more than seven months ago; both Comsource (in which 21 per cent shareholder KPN is known to be acutely short of funds) and many retail shareholders are anxious for an early result.

Meanwhile, Valentia sources have emphatically denied suggestions coming from the eIsland camp that there is any division in the ranks of the five partners in their consortium which was joined by the ESOT last week, after a ballot of Eircom employees voted overwhelmingly in favour of Valentia.

A new ballot is now certain to be held to consider the higher eIsland bid, but this may now be overtaken by events if Valentia makes a matching offer. In that case, the employees could vote on the merits of each offer in a single ballot.

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