Eisland will seek commitments from Eircom's biggest shareholder, Comsource, that it will support its bid, unless a much higher offer emerges.
It will seek these assurances immediately the 14-day period elapses, during which Valentia can match eIsland's latest offer.
On Friday eIsland offered €1.36 cash per share for Eircom, four cents higher than the Valentia offer, which featured cash up front and a deferred payment. Eircom had already recommended the Valentia offer and rejected a previous improved offer from eIsland. This was because Comsource had given irrevocable undertakings to Valentia to accept its offer, unless another bidder offered more than €1.355 cash.
Now Eircom has recommended the revised eIsland offer. Valentia has 14 days to match the bid, once the formal offer is made. This could take some weeks to send out. Valentia would not comment yesterday, but indicated it had plenty of time to consider its position.
It is understood the undertakings which eIsland will seek will amount to guarantees that a new bidder, including Valentia, must bid substantially more than its current offer.
The move is intended to put pressure on Valentia, led by Sir Anthony O'Reilly, to decide whether to match the bid within the 14 days and to make it difficult for it - or other possible bidders - to enter the fray once this period has elapsed.
EIsland is confident it can get such an agreement from Comsource, the joint venture between Dutch telecoms group KPN and Telia, the Swedish telecoms group, because the precedent had already been set by its undertakings to Valentia.
Meanwhile, Eircom has defended the use of a €15 million inducement fee to eIsland, if that consortium's bid is trumped. It is understood Eircom will not pay the fee - whoever outbids eIsland will.
According to Eircom, eIsland sought - and was given - the fee to reflect the significant financial hurdle eIsland had to overcome to deal with the irrevocable undertakings.
It is understood eIsland had wanted a substantially higher inducement fee. The money only becomes payable if another bidder's offer goes unconditional, that is they gain 80 per cent acceptances and can then compulsorily acquire the outstanding 20 per cent.
An eIsland spokeswoman said the €15 million was not to cover costs incurred by eIsland to date. It was to help cover costs incurred from here on, including banking and costs incurred in sending out the offer document to shareholders.
Shareholders will get an abridged version of the full offer, known as a 2.5 document, within the next week. It will outline details of the full offer.
The Employee Share Ownership Trust (ESOT) which holds 14.9 per cent of Eircom has been balloting on the Valentia offer. An ESOT spokesman said last night that the ballot was still going ahead, as the Valentia offer was still the only formal one on the table. But it is understood the ESOT will have to put the new offer to its members. The spokesman said it had not yet been contacted by eIsland.
The two sides are expected to be in contact this week. The ESOT's approval is deemed crucial for eIsland's bid to succeed. To date, the ESOT has been firmly behind the Valentia offer.
