New chairman at Eircom amid BCM sale rumours

30 Oct 2008

Amid reports that an Isle of Man-based equity fund called LIT has made approaches to buy Babcock Brown Capital (BCM), owners of Ireland’s incumbent telecoms provider Eircom, the telecoms company has appointed a new chairman to replace Pierre Danon, who left the company last June.

Eircom said today that it has appointed Ned Sullivan as non-executive chairman and director of Eircom.

Sullivan, who is currently chairman of Greencore Group and McInerney Holdings, is also a non-executive director of Anglo Irish Bank.

The news has been welcomed by Eircom’s employee share ownership plan (ESOP) which owns 35pc of the company.

The chairman of the Eircom ESOP Jerome Barrett commented: “On behalf of the ESOP Trustee Board, I congratulate Ned on his appointment and look forward to working closely with him to ensure the business prospers going forward.”

Sullivan’s appointment happens on the same day it emerged that LIT has approached Eircom’s owners BCM about a possible acquisition.

LIT, which listed on the AIM market last month, is currently making investments in a number of other companies.

If BCM is sold, it will be the fifth time that Eircom has changed hands since it was privatised by the Irish Government in 1999.

Present owners BCM took control of the company in 1996 after acquiring it at a cost of €2.3bn. Eircom currently has debts of about €4.2bn and has moved into a newly leased headquarters adjacent to Dublin’s Heuston Station.

LIT has a market cap of €125.4m and a company called Laxey Partners, which has a controlling interest in LIT, also has a 6.7pc share in BCM.

BCM shares have lost more than 67pc of their value in the past 12 months and the company has a market capitalisation of €139.6m.

Pierre Danon announced his departure from Eircom in June not long after the Irish Government rejected a plan by Eircom entitled Fibre Ireland to fibre up two-thirds of the country with 25Mbps broadband.

Danon left to take up the position of CEO with Numericable-Completel, a French-based, fibre fixed-line provider.

By John Kennedy

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