The board of Eircom meets this morning to consider bids from prospective suitors for the phone company. Only one of the contenders, Mr Denis O'Brien's eIsland, was prepared to confirm that it had made a bid last night.
The Valentia Consortium, chaired by Sir Anthony O'Reilly, also lodged a bid but was not commenting while uncertainty surrounded the intentions of IIU, the third prospective bidder, which is controlled by Mr Dermot Desmond.
Shares in Eircom rose two cents to 118 cents yesterday afternoon as the 5 p.m. bid deadline loomed. The details of the bids were confidential but the contenders were all expected to offer about 120 cents (95p) per share for the company, valuing it at more than #2.6 billion.
eIsland said it had submitted a letter to the board of Eircom which "contains a proposal to acquire the shares of the Eircom plc subject to the board's approval". Sources close to the Valentia Consortium, which is made up of venture capital companies, confirmed that it has also lodged a conditional offer with Eircom. IIU, the investment vehicle controlled by Mr Desmond, was not returning calls yesterday. The intentions of US buyout specialists Kohlberg Kravis Roberts also remain unclear.
Eircom required the prospective bidders to break down their offers under various headings including price, the source of their funding and how they plan to reach agreement with the Eircom Employee Share Ownership Trust. The ESOT, which owns 15 per cent of the company, is in a pivotal position as any successful takeover will almost certainly require its support.
The board of the ESOT, which is dominated by Eircom's unions, met in all-day session yesterday to discuss its position but has yet to back any of the contenders.
The Eircom board could take several days to digest the offers now on the table.
A spokesman for Eircom said last night the company was not commenting and would respect confidentiality agreements that it had signed with the bidders. Once the Eircom board has reviewed the offers, several courses of action will be open to it. The most likely is to choose a preferred bidder with a view to giving a recommendation to shareholders that they should accept it. Alternatively, the board may decide not to recommend any offer, which leaves the bidders with the option of making an unrecommended or hostile bid if they want to proceed. Either way, once a formal bid is launched the rules of the Irish Takeover Panel apply and a process will be set in train that could last between 21 and 81 days.
