The prospect of a takeover battle for the rump of Eircom continued to generate heavy trading in the shares, although price changes were negligible.
Dealers said there was heavy two-way trading in the shares in both Dublin and London, with investors taking sizeable punts that the Eircell sale to Vodafone and the looming takeover battle between the O'Reilly and O'Brien groupings would put a higher value on the shares than the market is at the moment.
More than 7.5 million Eircom shares traded in Dublin as the share eased a cent to €2.63 while in London more than 18 million traded as the share closed on €2.61.
Significantly, ABN Amro has recommended that investors should buy Eircom shares and hold them until they reach €3.00 before taking a profit.
An optimistic scenario of further costs savings and the elimination of the stock overhang could value the Eircom rump at €1.31, says ABN Amro. Add in the €1.60 value put on Eircell from Vodafone's price of 210p sterling yesterday and this puts a current value of €2.91 a share on Eircom. That valuation, however, makes a lot of assumptions which may not come to pass.
Cautious AGM comments about the domestic economy from the chairman weighed on AIB and the shares were down 25 cents on €12.08 while Bank of Ireland was 16 cents lower on €10.23.
