ESAT Telecom Group tried six times to get Telenor, the equal shareholder in Esat Digifone, the mobile phone company, to sell its current 49.5 per cent stake, but was rebuffed, it has emerged.
Its last offer was made just days before Newtel made a hostile bid for Esat Telecom.
Newtel is the company formed by the merger of Telenor, which is a Norwegian telecoms company, and Telia, the Swedish telecoms company.
The fifth Esat bid for the Digifone stake - which was made in October - was resisted by Telenor. But Telenor did offer to consider exchanging its Digifone shares for shares in Esat.
Then on November 21st - just nine days before Newtel initiated its takeover bid - Esat made a fourth proposal to buy all Telenor's interests in Digifone. The mobile operator is the most valuable part of Esat's business.
The details of Esat's bids are contained in the formal offer document which was posted to shareholders last night. The offer is worth £1.25 billion (€1.58 billion) to Esat's shareholders. The document reveals that since 1996 Telenor has made £47.5 million in "equity contributions" to Digifone. However, the document says Telenor is not remunerated for several services it supplies.
The document outlines the continuing litigation between Esat Telecom and Telenor over alleged conflicts of interest. For example, on November 16th Esat brought an action in the High Court against Telenor, seeking to have Telenor's representatives excluded from the Digifone board, pending arbitration to address alleged breaches of confidentiality under the shareholder's agreement. These alleged breaches were connected to the Newtel merger as Telia has a minority interest in Eircom.
Telia announced this week that it was disposing of its Eircom stake and Telenor was defending Esat's High Court action.
Under the takeover code, Esat now has 14 days to publish its defence to Newtel's hostile bid.
Esat's shares have continued to trade well above Newtel's $72 a share offer price and it is expected that despite sending out the offer document, the company will have to increase the offer substantially to win shareholders' support.
The market has speculated that this offer will have to be increased to around $90 a share if it is to have any chance of getting support from Esat's institutional shareholders.
An Esat spokesman said last night that "the offer is redundant as far as we are concerned" and the company would be responding in due course.
