Valentia Telecommunications has formally taken control of Eircom. The board of the former Telecom ╔ireann resigned yesterday and was replaced by seven directors nominated by the members of the Valentia consortium. Sir Anthony O'Reilly, the executive chairman of Independent News & Media, has become non-executive chairman of Eircom.
Mr Alfie Kane, the chief executive of Eircom, also announced that he would be leaving the company once a successor had been found. Valentia has approached Dr Philip Nolan, the chief executive of Lattice Group, but has yet to make a decision. Lattice Group is quoted on the London Stock Exchange and owns the former British Gas pipeline network, as well as a telecoms business.
Mr Kane is entitled to a severance payment of €482,500 (£380,000), which equates to one year's salary. Earlier this year, he negotiated a €1.245 million top-up to his pension.
"The time is right for me to announce my intention to stand down," said Mr Kane. Mr Peter Lynch, the finance director, also stepped down from the board, but is expected to continue with the company.
Only one Eircom director did not resign yesterday. Mr Paul Mackay, a non executive director, has opted to stay on the board until December 10th, when Eircom will be delisted from the Irish Stock Exchange, bringing the takeover to a conclusion. Mr Mackay - an accountant and prominent member of the Progressive Democrats - refused to resign as an Eircom director in January 1999 when the Government sought to rejig the board ahead of the flotation in the middle of that year.
Seven new directors were appointed yesterday. Providence Equity Partners, the US leveraged buyout group which has a 46 per cent stake in Valentia, has appointed four directors - Mr Paul Salem, Mr John Hahn, Mr Jonathan Nelson and Mr Biswajit Subramanian. Soros Fund Management, the other LBO fund backing Valentia, has two directors - Mr Ramez Sousou and Mr Niclas Gabran. Soros Fund Management has a 19 per cent stake in Valentia.
The Eircom Share Ownership Trust, which will have a 30 per cent stake in Eircom, has nominated Mr Con Scanlon to the board. Mr Scanlon is chairman of the ESOT and also general secretary of the Communications Workers Union, the largest union in Eircom. The ESOT is expected to nominate additional directors and the deputy chairman.
Sir Anthony owns 4 per cent through Lionheart Ventures (Overseas) Ltd. Goldman Sachs Group, the US merchant bank involved in the consortium, has taken a 1 per cent stake.
