Three Newtel executives met Esat chairman Mr Denis O'Brien in New York on Tuesday to put their proposal to him to buy the Republic's second-largest telecoms group for $1.59 billion.
By all accounts it was a short meeting - 20 minutes to half an hour. Mr Terje Thon, one of the Newtel executives who met Mr O'Brien, said they wanted to get his support for a recommended offer. Mr O'Brien holds 14 per cent of Esat Telecom Group but is believed to have options over a further 1 per cent.
Yesterday, Mr Thon said they "had had a conversation with Mr O'Brien but it wasn't possible to reach agreement". According to some sources, Newtel executives did not specify an offer price per share, but said it would have "a seven" in front of it. Mr O'Brien reportedly said thanks, but no thanks - he wasn't interested in selling.
The two Newtel executives, Mr Thon and Mr Morten Sorby, were accompanied by Mr Richard Tolkien, their adviser from HBSC. They then decided to put the offer to all the shareholders, announcing it early yesterday morning.
Mr O'Brien was in New York to meet Esat's institutional investors, having flown from London on Monday night. He had spent Monday addressing Investco and Fidelity which hold 6 per cent and 12 per cent respectively and had addressed a meeting of Barclays Bank.
Mr O'Brien is known as a good salesman and is said to pride himself on knowing the institutional investors who have always supported him. Like his counterpart Mr Michael O'Leary in Ryanair, he is respected by the institutions and is said to make impressive presentations. Rumours about a possible bid for Esat Telecom from Digifone's 49.5 per cent shareholder had been circulating for some time, as had rumours about other possible bidders.
Sources say Mr O'Brien was doing the rounds of his institutional investors, having got wind that a bid might be made. It is believed he was there to update on current progress and reinforce the message about what a good company he believes it is and to enlist their support for whatever he might do in the event of a takeover bid.
When the offer was announced, a meeting of the Esat Telecom board was convened yesterday morning. It unanimously rejected the offer.
Sources close to Mr O'Brien said last night that he believed the offer was "a derisory one" and that the company's value per ADR share is more than $100. In a statement he said the offer "fundamentally undervalues" Esat.
