A deal announced this week will give Denis O'Brien lots of options, writes Colm Keena

A number of years ago in an interview with this newspaper, entrepreneur Denis O'Brien said money had never been his main motivation but rather taking on and beating a competitor.

"I spend my time thinking of ways to create a downfall for my competitor, particularly if they are big," he said.

In that same interview, O'Brien (42) spoke about the attitude entrepreneurs have towards business.

"Entrepreneurs never know when to leave the casino. An entrepreneur always wants to start another business.

"It's part of your make-up. If an entrepreneur sells their business, within a couple of months they are off setting up a new business.

"It's different if you are 70 or 75 when you sell your business, but if you are in your 30s or 40s, it's go again.

"It's a natural thing to do."

And true to his word he has gone again. A deal in the Caribbean announced this week concerning O'Brien's hugely successful Digicel operation will see him taking 100 per cent ownership, rather than selling some or all of the business as had been expected for the past year.

The deal involves the original Digicel company, Digicel Ltd, based in Bermuda, being purchased by a new Bermuda entity, Digicel Group Ltd. Digicel Group is to raise $1.4 billion (€1.1 billion) by way of private placement notes, due in 2015. The purchase of Digicel Ltd is conditional on the sale of the notes by Digicel Group.

O'Brien is to be the 100 per cent owner of Digicel Group, which will be valued after the deal at $2.4 billion (€1.82 billion).

O'Brien owns 78 per cent of Digicel Ltd, and is to receive $1.87 billion for his stake, $1.1 billion of which he will invest in the new company.

On completion, the exercise will leave him with $700 million to $800 million cash to spend, creating much speculation as to what it is he will want to buy.

One suggestion is that he might use the cash in a battle to try to wrest control of Independent News & Media from Sir Anthony O'Reilly (70).

O'Brien already owns just more than 5 per cent of Independent and there has been much speculation as to what his intentions are. He has said nothing on the matter.

The indications this week were that while Independent is one of the items on O'Brien's table, his stake in the company is more part of a medium- to long-term gameplan than a bridgehead that is to be used in the immediate future.

An all-out launch by O'Brien would drive up the share price and he is unlikely to want to pay significantly over the odds for control of the group. And if they aren't being offered more than their shares are worth, then why would major investors who have done well out of O'Reilly's reign, want to sell out?

It's probably early days yet.

O'Brien's stash from the Digicel deal is likely to be used to increase his investment in a number of non-Digicel businesses, as well as allowing him avail of investment opportunities in new areas.

He has described himself in the past as an "opportunist" and the bag of cash will give him scope for some fresh moves.

The deal means a planned floatation of part of Digicel on the New York Stock Exchange will not now go ahead. It also seems that O'Brien's plan to get involved in the US telecoms market, discussed in interviews with some US media outlets last year, has been put on hold.

O'Brien has spent a long time investigating the possibility of moving into the US market and will not have walked away easily from the challenge.

It seems it was advice received in the course of planning for a possible floatation, that led to the deal announced this week. Alternative options, including a trade sale, were looked at, and there were a number of interested parties, according to one source.

The history of Digicel and projections for it for the next three to five years were among the issues examined.

One advisor is believed to have come to the view that, given the potential for growth in the next three to five years, it was much too early for a floatation.

One projection had the business doubling in value over the coming two years.

The deal announced this week allows O'Brien increase his shareholding in the business, and thereby benefit all the more from any growth in value over the coming period, while also managing to take money out of the company despite the decision not to proceed with a partial IPO.

It is not clear what will happen to shareholdings in Digicel Ltd belonging to staff or private-equity firm Blackstone Group.

Executive and director shareholders in Digicel Ltd are to sell their shareholdings.

The shareholders, who are to received varying amounts ranging from $70 million to $5 million, are: Leslie Buckley; Denis O'Brien snr; Lucy Gaffney; PJ Mara; and Greg Sparks. When they and former chief executive Séamus Lynch sell their shares to Digicel Group, they will have profited handsomely from their involvement in O'Brien's six-year-old Caribbean venture. Some are expected to continue as directors of Digicel Group and it is understood a new scheme is to be put in place for them.

Efforts yesterday to get a comment from one or more of these shareholders were unsuccessful.

In recent times the Digicel operation has expanded into the Pacific rim and South America. Digicel's Pacific rim operation is entirely separate from the Caribbean operation and O'Brien owns the bulk if not all of it.

Digicel Pacific "is committed to delivering world-class mobile telecommunications services to the south Pacific that will transform the region by placing it at the cutting edge of wireless technology, while challenging competitors in a manner that drives positive business development," according to its website.

In September 2006 it announced the acquisition of an operation in Samoa.

No doubt O'Brien has ambitious growth plans for his operations in the Pacific rim, South America, and the Caribbean.

He also has a range of investments in Ireland and elsewhere, all of which will now be reviewed in the context of the expected arrival of cash from Bermuda.

If Digicel Caribbean does double in value over the next few years, that will give it a value of €3.6 billion, or a billion more than the current market capitalisation of Independent News & Media. An IPO or trade sale at that stage must be a distinct possibility.

Should that occur then, unlike at the time of the sale of Esat Telecom to BT, O'Brien will own all of the shares and get all of the money. He will have a lot of money to spend in the casino. All he will need is a competitor to take on.