Counsel says Esat broke bidding rules

There was "nothing underhand" about the process for the sale of Cablelink and no favouritism had been extended to any bidder, Telecom Eireann and RTE insisted yesterday. It would be "commercial crassness of an unprecedented kind" had the sellers ignored an offer from NTL Communications of £471.5 million (€599 million), and the promise of even more, in favour of a £410 million offer from the Esat-led consortium, Howberry Lane, the High Court heard.

Mr Dermot Gleeson SC, for Telecom and RTE, owners of Cablelink, was opposing the application by Howberry for a continuing order preventing the sale of Cablelink to NTL.

A person selling by tender had completely free choice in deciding how much freedom of action they wish to preserve for themselves in the process, he said.

The extent of that freedom of action was "unequivocal" in the language of the tender documents in this case. The vendors had preserved maximum freedom of action throughout and until the end of the process. He said a letter from the selling agents, NM Rothschild's, of January 29th last, effectively invited the five parties involved to "roll their own" tenders.

Counsel said there was no legal principle or statutory scheme which limited freedom of action in this case. Howberry's goal was to secure the purchase of Cablelink for £410 million. The court could not grant such an order in the absence of any binding agreement between the two parties.

Dealing with Howberry's claim that NTL should be excluded from the tender process because of alleged breaches of procedures, Mr Gleeson said if it was correct to assert that any lack of compliance must mean mandatory disqualification, then Esat itself must be disqualified because it had breached the rules in three respects - it broke a confidentiality agreement, failed to furnish documents regarding completion of sale and had entered the procedure as Esat Telecom but was now part of Howberry.

When NTL submitted its bid, "perhaps in an unconventional format", for £471.5 million on April 23rd last, his clients would have been entitled to accept it. But, in a decision underlining their commitment to give everyone a fair chance, they invited all the parties to submit revised final bids.