French telecoms billionaire Xavier Niel has set off on a path towards full ownership of Eir, as two US hedge funds begin to exit their investment in the former Irish telecoms monopoly.
“We are starting to buy their shares,” Mr Niel said in an interview with The Irish Times this week.
Two firms belonging to Mr Niel, Iliad and NJJ, acquired 64.5 per cent of Eir in April 2018 in a deal that gave the company an enterprise value, including debt, of €3.5 billion. That transaction saw two of the company’s largest pre-existing investors, hedge funds run by New York firms Anchorage Capital and Davidson Kempner, roll most of their shares into a combined 35.5 per cent interest.
It is understood that Davidson Kempner sold its 8.9 per cent holding in Eir over the summer to Anchorage Capital. Anchorage, in turn, recently began to gradually sell down the combined stake by participating in a share buyback by a holding company above Eir.
The holding company, called Carraun Telecom Holdings Limited, disclosed in Companies Registration Office filings this week that it has bought back and cancelled 3.3 per cent of its shares for an undisclosed amount. This has meant the stake owned by Mr Niel’s firms rise to 66.7 per cent.
A spokeswoman for Davidson Kempner declined to comment, while representatives for Anchorage did not respond to an email seeking comment.
The US funds were part of a group of investors that acquired shares in Eir after it emerged from examinership in 2012, following a debt restructuring in which about 40 per cent of its then €4.1 billion of borrowings were written off and senior lenders seized control.
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Staying on board has paid off. The two funds have shared in the more than €2 billion in dividends that Eir has paid up to its owners since the 2018 takeover. The distributions equate to twice the €1 billion equity value of that deal.
Mr Niel defended the level of payouts in the interview, saying: “We always invest as much as we [take] in dividends. Sometimes more. We share what we do between three. First, the company and the people working in the company. Second, the customers. And third, the shareholder. It’s always what we do in all our countries.”
He referenced the launch of Eir’s GoMo low-cost, Sim-only service five years ago as shaking up the market and how the company, which is spending €250 million a year on capital investment, now has 1.2 million homes and businesses connected to its fibre network. It targets reaching 1.9 million premises by the end of 2026.
Mr Niel, whose companies own telecoms businesses in 23 countries with more than 110 million subscribers, insisted in the interview that he will not become part of the long roll-call of one-time owners of Eir. “It will not be for sale, until the day I die,” he said.
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