Are international suitors lining up to buy a stake in Eir?

15 Sep 2017

Eir headquarters, Dublin. Image: Eir

French billionaire Xavier Niel is reported to be a potential suitor for Ireland’s incumbent operator, Eir.

Eir may be about to have a new shareholder of scale and experience as reports suggest that an international telecoms company or equity firm is sniffing around a majority stake in the telco.

It emerged this morning that shareholders in Eir have been approached by a potential investor who may wish to make a significant investment alongside them.

According to the Irish Independent, the current shareholders – Anchorage Capital, Davidson Kempner Capital and Singapore’s sovereign wealth fund GIC – will retain significant holdings in Eir alongside the potential new investor.

The Irish Times reported that an approach had been made by French billionaire and majority owner of Paris-listed telecoms company Iliad, Xavier Niel.

Eir achieved a value of €3.5bn last year when GIC acquired a stake in the company.

Fibre and content at core of Eir strategy

This week, the operator reported that annual revenues were up 1pc to €1.32bn. Operating costs were down 5pc while cashflow generation improved.

The company is pushing towards a target of 1.9m fibre premises by the end of 2018, including 300,000 homes that had been part of the National Broadband Plan intervention area, but now have been secured by the operator as part of a deal with the Irish Government.

A key factor in Eir’s turnaround in five years has been astute moves on fibre, 4G and convergence, with acquisitions of players such as Setanta boosting the operator’s content offerings.

Xavier Niel owns 52pc of Iliad where he is deputy chair and chief strategy officer, and is understood to be pursuing a stake in Eir through an investment company called NJJ Capital.

Niel has a net worth estimated at €8.3bn and is also the co-owner of French newspaper Le Monde. As well as his majority stake in Iliad, Niel also has a controlling stake in Monaco Telecom.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years