LONDON - Irish telecoms group Eircom has confirmed that an approach has been made for a possible takeover on Wednesday, but did not give any further details. But the Wall Street Journal reports that Swiss telecoms operator Swisscom is behind the takeover approach.
Cash-rich Swisscom was tipped to be on the lookout for new acquisitions, but did not comment on the WSJ reports. However the news of a possible bid pushed Eircom shares up by a massive 15.8 percent to 2.40 euros. At this rate the company is valued at 2.57 billion euros ($3.09 billion).
The UK telecoms market has seen a lot of movement in the last week or so. Spanish giant Telefonica made a formal offer of £18 billion for mobile giant O2 and it looks like the bid is going to be accepted after Deutsche Telekom said that it would not make a counter bid.
Speculation that Swisscom is indeed the suitor for Eircom stems from the fact that that Swiss giant has been pipped to the post by Telefonica for Cesky Telecom, the Czech operator. Last year, Swisscom also failed to annex Telekom Austria and analysts say that the company has enough cash reserves to make a concerted bid for Eircom.
This plus the fact that the home turf is heating up as rival Cablecom is getting more customers for its broadband connections, has forced Swisscom to look for greener pastures abroad. Reports also say that Swisscom could team up with Babcock & Brown Capital, an Australian investment fund for the Eircom deal.
Eircom came into existence in 1984 and was floated on the Stock Exchange in 1999. In 2001, Vodafone acquired Eircell, its mobile business. Its employees own a stake of 21 per cent and stand to get €630 million if the deal dos go through.
Posted
on : Thu, 03 Nov 2005 16:15 GMT | Business News
By : Anne Philips
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