Mr Denis O'Brien has accused Sir Anthony O'Reilly of planning to asset-strip Eircom. Mr O'Brien said yesterday that a consortium of foreign banks chaired by Sir Anthony would break up and sell off the company within three years.
Sir Anthony, the chairman of Independent News & Media, confirmed yesterday he is chairing a group of investors that may bid for Eircom after the sale of Eircell to Vodafone next month.
The consortium has been put together by Goldman Sachs, the US merchant bank, and includes the international financier Mr George Soros. Its emergence as a rival to Mr O'Brien's eIsland consortium pushed Eircom shares up to €2.70 yesterday, their highest level since December.
Mr O'Brien, who has been working on his own bid for five months, described the O'Reilly consortium as "already having one foot in the departure lounge".
This contrasted with his consortium which was "Irish-controlled and took a 10-year view", said Mr O'Brien.
The eIsland consortium is also backed by international banks and only a portion of the €3.4 billion it has offered for Eircom will be put up by Mr O'Brien and his associates. Other - most likely foreign - investors will also be involved.
Mr O'Brien also made an indirect reference to the fact that Sir Anthony is now almost 65 and is currently winding down some business interests after retiring as chairman of Heinz last year.
The former Esat Telecom chairman pointed out he was 43 and actively looking to re-enter the telecommunications business after selling Esat to British Telecom in Januaury 2000 for £1.9 billion.
Sir Anthony's name first surfaced in connection with Eircom last November. Industry sources said yesterday he was approached by Goldman Sachs after it decided to join forces with a number of other financial institutions that were looking at the situation, including Soros Private Equity and Providence Equity Partners. London-based Warburg Pincus is also involved in the group, which is prepared to offer between €2.6 billion and €2.7 billion.
The Eircom Employee Share Ownership Programme Trustee, which owns 15 per cent of Eircom on behalf of employees, said both Mr O'Brien and Sir Anthony's consortiums had approached it. Winning over the ESOP is seen as significant challenge for Mr O'Brien, who until now has not been a believer in organised labour. Sir Anthony's consortium will also seek its support.
Neither side is expected to launch a formal bid in the short term.
