Vodafone's record £3 billion sterling (€482 billion) share placing yesterday resulted in a sharp fall in the value of Eircom shares, as the market adjusted the Vodafone share price downwards to reflect the cash call.
The British mobile phone giant, which is looking to purchase Eircell, announced the placing after agreeing to buy BT units in Japan and Spain. Eircom closed down 10 cents on the Dublin market on €2.58 after heavy trading, reflecting the 7-1/2p fall in Vodafone shares which closed on 199p sterling. This closing price translates to €1.66 a share for Eircell when the mobile phone subsidiary demerges from Eircom later this month.
Meanwhile, Eircom has said that its shares will formally split on May 14th, when investors will receive one Eircell 2000 share while retaining their existing shares.
The National Union of Journalists said it was concerned about developments in the sale of Eircom, regarding the monopoly of media ownership. "We don't want to see Tony O'Reilly become a player across the board," said Mr Seamus Dooley, the union's Irish organiser. "Eircom is more than just a telephone company, and its information role will become more vital as the technology advances."
