Businessman Mr Denis O'Brien, who made £250 million when Esat Telecom was bought by British Telecom earlier this year, is set to make a €2.2 billion (£1.75 billion) bid for Eircom's traditional core telecoms business.
An announcement by Mr O'Brien, who is heading a consortium backed by the American bank Chase, may be made today.
While a spokesman for Mr O'Brien would not comment yesterday, it is understood that Mr O'Brien has informed Eircom's advisers, Merrill Lynch, that his consortium is willing to pay €2.2 billion for the fixed-line business.
This is the equivalent of €1.00 for every Eircom share. Some of the details of the O'Brien approach are reported in Business & Finance.
Eircom is already in discussions with the British group Vodafone on the possible sale of its mobile phone subsidiary Eircell for more than €5 billion. An Eircom spokesman would make no comment on the approach from Mr O'Brien and his consortium.
But while sources close to the O'Brien grouping said that the €2.2 billion value on the fixed-line business is fair and reasonable, market sources have said that this part of the business is worth significantly more than this and that the O'Brien grouping's tentative offer may be no more than an opening shot.
Stock market analysts said that Mr O'Brien may have to pay closer to €3 billion - the equivalent of €1.35 per Eircom share - if he is to get the support of the Eircom board.
While Eircom shareholders might jump at the chance of recouping some of their investment, getting the support of Eircom's staff who own 15 per cent of the company, may be more difficult.
Mr O'Brien ran Esat Telecom as a strictly non-union company. Eircom, in contrast, is heavily unionised.
Taking over Eircom's fixedline business would put Mr O'Brien in direct competition with British Telecom who bought Esat earlier this year.
Mr O'Brien's departure from Esat did not include any non-competition clause.
A spokesman for BT wished Mr O'Brien well. Industry sources said yesterday that Mr O'Brien was being opportunistic by making his move when Eircom is already in talks to sell Eircell to Vodafone.
If both sets of talks are successful, it is expected that both deals will be put to shareholders as a package.
As a result, Mr O'Brien may get away with paying less for the fixed-line business than if he tried to buy it otherwise.
The bids for the two main parts of the Eircom business have raised the prospect, however, of Eircom's 480,000 shareholders getting back most if not all of the money they invested in Eircom's flotation 16 months ago.