Telia, Kane at odds over equity sale as Eircom shares fall further

Telia, the Swedish telecoms group, denied it ever agreed to sell its stake in Eircom as shares in the Irish group reached yet another low yesterday. Eircom shares fell to 297 cents in Dublin before recovering to close at 305.5 cents, down 10.5 cents on the day. Irish-based fund managers were reported to be heavy sellers following the company's results on Wednesday and Telia's announcement that it was not selling its 11 per cent stake.

The Swedish group yesterday refuted the assertion by Mr Alfie Kane, the Eircom chief executive, that it had agreed to sell the shares in a secondary offering this summer along with KPN, the Dutch phone group, which held 21 per cent. The two companies acquired the shares as part of a strategic alliance in 1996. Mr Kane said the first he knew about Telia's change of mind was when he received a phone call in the early hours of Wednesday morning. KPN confirmed on Wednesday that it was selling its shares. "We were all geared up for a sale process in the coming months. I only learned on Tuesday night that Telia, who had earlier confirmed a decision to sell, had reversed that decision," said Mr Kane. Ms Cecilia Giertta, a spokeswoman for Telia, said: "He may have taken for granted that we would sell together since out holdings are in a joint company. But there was never any agreement that we would sell together with KPN."

She added: "We are not selling our shares in Eircom along with KPN because we do not have the same capital requirement as KPN and because we are in the middle of our own IPO." Ms Giertta said they would sell the shares "at the right time". An Eircom spokesman last night reiterated the company's position that both KPN and Telia had agreed to sell.

"`We asked them to confirm their intention just before our preresults closed period and issued a statement to the stock exchange," he said. Analysts in Dublin were yesterday holding out the prospect that Eircom shares may have bottomed out. "They are now at an appropriate discount to their European peers and assuming the sector does not fall further they may have reached their low," said one analyst yesterday.