Eircom is seeking consent from its bond holders to pay a special dividend to its venture capital and employee shareholders in the event of a public flotation.

It also confirmed yesterday that the board of directors of Valentia Holdings - Eircom's parent company - is now actively considering an initial public offering.

In a statement, Eircom said no decision had yet been made on the flotation, and the timing of any public offering would depend on market conditions and other factors. The statement confirms recent speculation that Eircom was considering coming back to the markets just two years after the company was taken private in a €3 billion deal concluded by a consortia of venture capitalists.

Banking sources tentatively value the firm at between €3.2 and €4 billion suggesting that Eircom's owners, headed by Sir Anthony O'Reilly, will make a huge profit on their investment.

Eircom is majority owned by US funds Providence Equity Partners and Soros Private Equity. Sir Anthony O'Reilly owns 5.1 per cent of the firm and staff own a further 29.9 per cent through the employee share ownership trust.

Any successful public flotation which valued Eircom at the top end of the range is likely to result in a massive payout to the company's staff over several years.

Shares worth €12,000 per year can be dispersed without the recipients having to pay tax.

Meanwhile, it emerged yesterday that Eircom is likely to enter detailed talks with the mobile phone firms Meteor and O2 in the next week to attempt to tie down its mobile strategy.

Eircom recently sounded out both Western Wireless and MMO2- the parents of Meteor and O2 Ireland- about acquiring their Irish operations. But the firm balked at the prices which both companies were seeking.

Eircom now believes the best way to get back into the market is by signing a deal with an existing mobile operator that would enable piggybacking on its network to provide a mobile service.

It is understood Meteor and O2 both replied earlier this week to tenders issued by Eircom seeking this type of mobile virtual network operator (MVNO) deal.

Neither firm would comment on their specific dealings with Eircom yesterday. But a Meteor spokesman said the company was open to facilitating any firm seeking to be a virtual operator.

Experts believe Meteor is the most likely candidate to partner Eircom because it has the fewest customers of any mobile operator. It also targets the pre-paid market, which is not likely to be the main target for Eircom.

Vodafone, which holds 56 per cent of the market, is not likely to welcome a big player such as Eircom getting a foothold back into the sector anytime soon.

But it is understood Eircom has now conceded that it is not likely to have a strategy in place if it decides to float in March.

Under the terms of Eircom's refinancing last year it must now write to its bondholders to ask for approval to pay a dividend in the event of a flotation. The bondholders are expected to sanction the dividend by February 4th.

Most market observers believe Eircom will attempt to complete an initial public offering in either March or April if market conditions remain favourable.

The decision to go back to the market just two years after some 500,000 Irish shareholders were forced to sell their shares in the firm at a loss to the Valentia consortia will be controversial.

It is unlikely that Valentia would offer shares to the public in a retail share offering.

Eircom has hired the investment houses Goldman Sachs and Citigroup to act as advisers in seeking bond holder consent.