By Harry Keaney
Such was the festive Irish atmosphere on Wall Street last Thursday morning that it wouldn’t have been a surprise if the financial district’s well-known statue of the bounding bull was replaced by a Celtic Tiger. The occasion was the launch on the New York Stock Exchange of Telecom Éireann’s shares, which got off to a strong start, rising by nearly 20 percent to more than $19.
Telecom Éireann’s American depository receipts closed Thursday at $19.3125. The ADRs equate to four Telecom Éireann ordinary shares. Prior to the flotation, the government set the share price at £3.07.
As is the custom when new shares begin trading on the NYSE, the issuing company’s banner, with name and logo emblazoned, was draped across the exchange’s ornate, columned exterior. Irish flags, as well as green, white and orange balloons, fluttered in the morning breeze while the sounds of Irish music and song echoed through the lower Manhattan canyons.
In a tent outside the stock exchange, traditional Irish hospitality was on tap with Irish tea, Bewleys coffee, Tipperary spring water and scones served up by staff from Fitzpatrick Grand Central Hotel.
The Galway street theater group Macnas staged a colorful pageant with drummers followed by likeness of Irish literary figures such as Behan, Joyce and Wilde.
Sign up to The Irish Echo Newsletter
Inside, Public Enterprise Minister Mary O’Rourke, Telecom Éireann Chief Executive Alfie Kane, NYSE Chairman Richard Grasso and Dan Tully, chairman emeritus of Merrill Lynch, launched the shares. Standing on a balcony, they clapped hands and banged a bodhrán. Then, the exchange bell rang out, marking the start of another day’s trading. In that instant, Telecom’s shares were thrust to the mercy of the global marketplace, gobbled up by insurance companies, mutual funds, large private clients and pension funds.
By lunchtime, Thursday, some $40 million worth of shares had been traded.
At a subsequent press conference on the NYSE’s sixth floor, Grasso described the Telecom Éireann launch as "an historic moment."
"In its 207 years of operations, the listing of Telecom Éireann this morning is a very special occasion," he said.
O’Rourke said that 574,000 people in Ireland, comprising about an equal number of men and women, had bought Telecom shares. She said 41 percent of those had each spend £1,000 or less.
Kane, in answer to reporters’ questions, said Telecom Éireann would concentrate initially on expanding in the U.K.
As to speculation that Telecom Éireann may in time become target for acquisition, Kane said that as a publicly listed company, it could be subjected to takeover. "The board would have to consider that in the interest of shareholders," he said, adding, however, that there was no reason why Telecom Éireann itself could "not proceed in an acquisition mode."
Telecom Éireann currently employs about 12,000 workers. It has reduced its workforce by about 6,000 since 1984. Asked if further reductions were in the pipeline, Kane said that he would prefer to reverse the question and dwell on additional revenue the company would generate. He added that Telecom would not cut jobs in "a kamikaze manner."
O’Rourke said she did not know the overall cost of the launch. However, published reports say Merrill Lynch and AIB Capital Markets are likely to earn in the region of £60 million from the flotation.
With the Irish government now having sold its 50.1 percent stake in Telecom Éireann, O’Rourke jokingly told Kane that the company was now free of government interference. With that, she shook his hand and wished him luck.
The government’s sale raised about $4.3 billion, a massive financial injection for the Irish exchequer.
It also means that households throughout Ireland, which never before had dealings with the stock market, are now stakeholders in one of Ireland’s largest companies. In addition, the flotation has generated a new and widespread interest by the Irish public in the gyrations of the stock market, another consequence of the buoyant Celtic Tiger economy.
Telecom Éireann shares were also launched Thursday morning on the Dublin and London stock exchanges.