Eircom finally reaches agreement

Valentia looks set to be the winner in the bidding war for the Irish telecom.

After months of discussions, bids and counter bids, the board of Eircom has reached an agreement with the Valentia consortium.

In order to reach this point and secure a deal the consortium, which is led by media magnate Tony O’Reilly and includes financier George Soros, had to raise a previous bid of E1.22. It is now offering a choice of E1.27 cash per share or E1.32 in a mix of cash and warrants.

Valentia has been given a two week period of exclusivity until 25 June in which to finalise the terms of the offer. Comsource, a vehivle made up of operators KPN of Holland and Telia of Sweden which owns 35 per cent of Eircom, has agreed to the offer.

Meanwhile e-Island, the consortium led by Denis O’Brien, that had first approached Eircom last October, increased its cash offer last Sunday from E1.241 per share to E1.305 per share. It has also offered a cash consideration alternative of E1.2496, which includes a dividend of E0.0246 plus warrants over 10 per cent of the common equity value of e-Island valued at between E0.06-0.12 per share. In a statement today it compares its offering to Valentia’s claiming that its offer is higher than that proposed by its rival.

Eircom disagrees. It believes that when the packages are put together the Valentia bid is “marginally” higher than e-Island’s.