Eircom rejects €3.3bn bid as undervaluing company – Blackstone sells 25pc

20 May 2015

Eircom is once again at the heart of a bidding war for the company after the operator rejected an offer of €3.3bn as too low.

Eircom has two options before it, either it proceeds on its path to profitability and eventually pursues a public flotation or it gets acquired by another entity. That other entity could either be an investment group or another telecoms operator.

Eircom told the stock exchange that the offer it received was too low and that the issue is not being progressed.

At the same time it has emerged that Eircom’s biggest shareholder, Blackstone, has sold its 25pc stake in Eircom to New York-based Anchorage Capital.

Eircom has been steadily reducing its operating and pay costs and is nearing break-even, an event that the company described as “an inflection point” for the business as the company makes the most of its edge in quad play.

Astute investments in broadband infrastructure are also paying dividends for Eircom. On Monday the company reported it has passed 1.2m homes with its fibre network, representing 50pc of the company’s entire base.

Anchorage is now the largest shareholder in Eircom while Blackstone has retained a 5pc stake.

Broadband image via Shutterstock

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