Eircom gets takeover bid

(Associated Press) Eircom Group PLC announced Friday night it had received a euro2.36 billion (US$2.86 billion) takeover proposal led by the Australian investment group Babcock & Brown, which in February declared its interest in buying Ireland's largest phone company.

Eircom, a former state monopoly privatized in 2000, said its board received a "joint proposal" from Babcock & Brown and the company's own Employee Share Ownership Trust that "may or may not lead to an offer being made."

Since October, Sydney-based Babcock & Brown has accumulated a 28.8 percent share of Eircom stock, while the employee trust holds 21.6 percent. The proposal would value Eircom shares at euro2.20 (US$2.67) a share, a 2.8 percent premium to Eircom's closing price Thursday in Dublin. The Irish Stock Market was closed for the Good Friday holiday.

The proposal stipulates that the employee trust -- representing the holdings of 12,000 current and former Eircom workers -- would commit the value of their holding to the Babcock & Brown bid, and in return would receive a similarly valued shareholding in the newly constituted company.

Eircom is the dominant provider of fixed-line telephone services in Ireland and has been slowly rolling out broadband services to this economically booming country of 4 million. The company sold its mobile-phone business to Vodafone Group PLC in 2001, but returned to the sector last year by buying Ireland's smallest mobile provider, Meteor.

Swisscom AG, Switzerland's major phone company, last year sought to buy Eircom for more than euro2.40 a share. But those talks ended in December after the Swiss government, which owns two-thirds of Swisscom, barred the company from making foreign acquisitions.

The 2000 flotation of Eircom was a disaster for most of the small-time Irish investors who bought its shares; they lost about two-thirds of their investment when the dot-com bubble burst. But the company's fortunes turned positive again after being taken over by a consortium led by Irish tycoon Anthony O'Reilly. Since relisting on the Irish market in 2004, Eircom's shares have risen 38 percent.