ZURICH: Switzerland's telecoms operator Swisscom said it is talking to Ireland's Eircom but it is not sure of a possible take over.
In a posting on its website, Swisscom said it is confirming that it has entered into discussions with Eircom in relation to a possible transaction. "However, there can be no certainty that an offer will in fact be made."
Swisscom wants to shore up its balance sheet as it is facing a dwindling domestic market and competition from other European players. Acquisitions are an easier way out.
The European telecoms major has been confirming reports that it is scouting for possible acquisitions abroad. Its earlier efforts had met with failures. It could not seal the deal in the case of Telekom Austria and Czechoslovakia's Cesky Telecom. It has also been seen as a possible buyer of Denmark's TDC, which is up for grabs.
Two rival private equity consortiums are now in the fray for TDC -- one group comprising Permira, Apax, Blackstone, Kohlberg Kravis Roberts and Providence Equity Partners and the other made up of Apollo Management, BC Partners, Cinven and Silver Lake. A due diligence process is currently on.
Analysts say TDC could be a better option for Swisscom as it has several overseas assets and is valued at $12 billion. Eircom is comparatively a small operator, mainly in the fixed-line segment with a fledgling mobile operation.
Sources close to the negotiations revealed that Eircom received an indicative offer price, which valued the company at more than 2.6 billion euros. It has then allowed Swisscom to carry out a due diligence, which is expected to take about four weeks.
Employees own 21 per cent of Eircom through a trust and any buy-out could mean a windfall for them.
Posted
on : Thu, 10 Nov 2005 08:25 GMT | Business News
By : Pippa Fielding
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