The battle for Eircom took a new twist today when the group's board switched its preferred bidder and said shareholders should now approve an offer from the eIsland consortium.
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Mr Alfie Kane, chief executive, Eircom
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The Eircom board recommended that shareholders accept the eIsland consortium's raised offer, which values Eircom at about €3 billion, in preference to an offer by Valentia.
Valentia immediately urged Eircom shareholders to wait before accepting eIsland's offer, insisting in a statement that it still had 14 days to revise its own offer.
EIsland's latest offer stands at €1.36 per share in cash, nine cents higher than the Valentia offer. The Eircom board originally favoured the Valentia bid but said it could change its mind if a rival bidder topped €1.35 per share.
Valentia responded quickly today to the new eIsland bid by noting it already had the support of minority shareholders KPN of The Netherlands and Telia of Sweden, who together hold 35 per cent of Eircom shares.
But the two shareholders could renege on the deal to sell the stakes because they have a get-out clause in case of any rival bid emerging that tops €1.355 - as the eIsland offer does.
"Valentia is assessing the announcement and certain issues arising from it and in the meantime encourages Eircom shareholders to take no further action," it said in a statement.
AFP