February 16, 2011
By Staff Reporter
By Andrew Bushe
DUBLIN – The latest offer for Eircom by the consortium led by Sir Anthony O’Reilly is expected to give him victory over rival Denis O’Brien after months of bid and counter-bid in the takeover battle for the land-line business of the former state telephone company.
Minister for Finance, Charlie McCreevy has been asked to change Irish tax law in order to allow Valentia’s _2.36 billion (c. $2.45 billion) bid for Eircom to proceed. The changes are apparently needed to enable the Eircom Employee Share Ownership Trust to participate in the Valentia bid.
O’Reilly’s Valentia group has offered 1.365 euros per share in a deal worth about 3 billion euros.
It resulted in the Eircom board withdrawing their support for a 1.36 euros per share offer by O’Brien’s eIsland group and backing the latest Valentia bid.
Although it is only marginally higher than the last eIsland offer, the latest Valentia bid is regarded as a knockout blow as it has “locked in” support from the Comsource 35 percent shareholding in Eircom unless there is a counter-bid of more than 1.50 euros per share.
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Comsource is the holding company for the shares held by the former Dutch and Swedish state phone companies.
Valentia already has the backing of the ESOT staff trust that owns 14.9 percent.
For a takeover bid to be successful, it has to get 80 percent backing from shareholders.
O’Reilly’s offer will still leave about half a million people with a loss of about a third on the price they paid when the company was floated in June 1999.