The size of Sir Anthony O'Reilly's shareholding in the consortium buying Eircom for #2.88 billion will not be disclosed, according to a spokesman for Valentia Telecommunications.
Sir Anthony is chairman of Independent News & Media as well as non-executive chairman of Valentia. His other media interests, including newspapers and cable television may be an obstacle to the deal going through, although Valentia yesterday dismissed it as a problem.
The group of US merchant banks that makes up Valentia saw off eIsland, a rival consortium headed by Mr Denis O'Brien.
The O'Reilly-led consortium made a final cash and paper offer late on Sunday night worth #1.308 - according to Eircom - which topped Mr O'Brien's last cash offer of #1.3050.
The Eircom board decided to recommend the Valentia bid at an early morning meeting yesterday and Eircom has now entered into two weeks of exclusive negotiations with Valentia.
The terms of the deal are due to be finalised next week and the grouping then has 28 days to make a formal offer to shareholders, which is defined as posting a document to each shareholder outlining the details of the offer. Shareholders will then have 21 days to accept the offer, although the deadline could be extended.
Once Valentia has received acceptances from shareholders owning 80 per cent of the company it can compulsorily acquire the outstanding shares.
The grouping already has the support of 35 per cent shareholder Comsource and the Employee Share Ownership Trust (ESOT) which owns 15 per cent, although the ESOT cannot sell until it has balloted its members.
The remaining 50 per cent of the company is held 30 per cent by financial institutions and 20 per cent by small shareholders. Assuming the deal proceeds as planned, shareholders are unlikely to get their cash payment until August.
Most small shareholders paid #3.90 for their shares when Eircom floated just under two years ago.
Last month the company sold its mobile division to Vodafone in an all-share deal which was worth around #1.50 per Eircom share based on yesterday's Vodafone price.
Taking the Valentia offer at #1.308, the small shareholders are still looking at significant losses.
The deal will first have to pass a number of regulatory hurdles. The size of the transaction means that the takeover may have to be approved by the European Commission, meaning that the Irish regulatory apparatus is bypassed.
Normally, all takeovers over a certain size are referred to the Tanaiste, Ms Harney, for approval and she seeks the advice of the Competition Authority. If the takeover is referred to Brussels instead, the Tanaiste will have to specifically ask for it to be referred back to her if she wants to examine it.
A spokesman for Valentia said yesterday the consortium did not believe Sir Anthony's involvement in Independent News & Media will be a problem. Sir Anthony and his family are the controlling shareholders in Independent with a 27 per cent stake.
As well as being the dominant player in the daily and Sunday newspaper market, Independent owns 50 per cent of Chorus, the second largest cable company in Ireland, which has entered the telephony market in competition with Eircom.
The Office of the Director of Telecommunications Regulation will also need to approve the sale as it involves a change in the ownership of various licences held by Eircom.
The director, Ms Etain Doyle, is likely to look into the issue of Sir Anthony's indirect stake in Chorus. She has already made it clear she does not believe Eircom should be involved in fixed-line telephony and cable. In 1999 she forced the company to sell Cablelink - its cable subsidiary - to NTL.
