The Eircom board is expected to consider at least two final takeover proposals when it meets at 8 p.m. today. The meeting is set to last two hours but the outcome is far from certain.
The firm's advisers have asked eIsland and Valentia to submit their final offers by 4 p.m. today.
Both are expected to wait until the last minute before complying and there is a strong chance that Kohlberg Kravis Roberts & Co, the US buyout group, will also meet the deadline.
EIsland is still very much in the race for Eircom despite the decision by the Mr Denis O'Brien-led group to withdraw its latest proposal.
The consortium made an offer at 5 p.m. on Tuesday - just ahead of an Eircom board meeting to review progress in the sale process - and gave the company until midnight to decide whether to support it.
Eircom's advisers asked eIsland to extend the deadline but the consortium refused and withdrew the offer.
The latest eIsland offer is an improvement on the #1.241 per share it bid on Friday.
The Employee Share Ownership Trust (ESOT) has been offered an additional 0.2 per cent of the company, on top of the 10 per cent already offered, taking its stake from 15 per cent to over the 25 per cent threshold that gives it valuable voting power.
EIsland has also offered to give the staff and management a share option scheme that could allow them earn another 5 per cent of the company.
The most significant element of the revised offer is the granting of warrants to the exiting Eircom shareholders that would give them some stake in any future takeover or sale of the business.
The warrants, worth six cents a share according to eIsland, would result in 5 per cent of the proceeds of a sale or takeover being distributed to the original shareholders in proportion to their original stakes.
Although eIsland has withdrawn the offer, it is still effectively on the table and is likely to be improved on, if anything, this afternoon when the consortium is expected to make a final proposal.
By making a new offer and withdrawing it before the board could fully considered it, eIsland has avoided having it rejected but made it almost impossible for the Eircom board to recommend the rival offer still on the table from Valentia, of which Sir Anthony O'Reilly is chairman.
The US venture capital companies that make up Valentia have the support of the ESOT, which will get 29.9 per cent of the company under their proposal.
Valentia has only offered #1.221 per share and has not said if it is offering any warrants or share options.
The Eircom board would find it hard to recommend the current Valentia offer because it is less than the last eIsland bid.
This is because the board is obliged to act in the interest of all shareholders - which implies obtaining the highest possible price.
As they stand, neither bid is considered acceptable by the board and a significant minority of the Eircom directors are expected to argue that talks with both parties be terminated if their positions remain unchanged.
Another grouping, centred around the chairman, Mr Ray MacSharry, and non-executive directors Mr Jim Flavin and Mr Pat Molloy, are keen that the current process results in a successful sale.
Comsource, the joint venture between KPN of the Netherlands and Telia of Sweden, that owns 35 per cent of Eircom is also keen to sell. It has three seats on the 11-strong board.
Kohlberg Kravis Roberts & Co (KKR) is close to deciding whether it will make an offer and has indicated that it will move quickly. In order to get a recommendation from the board, it would need to top both Valentia and eIsland in terms of price and match Valentia's offer to the ESOT.
The US buyout group is the only bidder to express a desire to retain the current management team headed by Mr Alfie Kane, the chief executive, and Mr Peter Lynch, the chief financial officer.
Mr Kane and Mr Lynch are both directors of Eircom. KKR will also encourage the executives to take a significant stake in the business, but have stopped short of trying to engineer a management buyout.
KKR is being advised by Merrill Lynch which are also the advisers to Eircom along with Goodbody Corporate Finance. Blackstone Communications Management Associates, another US buyout group, has also approached Eircom in recent days but is not likely to meet tomorrow's deadline.
Blackstone is acting on behalf of Blackstone Communications Partners, a $2 billion (#2.4 billion) fund that invests in telecommunications businesses. The group has invested in a range of businesses including Dell Computer and Union Carbide.
If the board recommends an offer, the bidder will make a formal offer to shareholders. The unsuccessful bidders can still make a rival offer as can groupings like Mr Dermot Desmond's International Investment & Underwriting, which have been tracking the process.
