Eircom has agreed to extend the exclusive negotiating rights granted to Valentia Telecommunications by one week until next Monday. Valentia was due to have finalised its #2.9 billion (£2.3 billion) offer for Eircom by last Friday and announce it to the stock exchange, but asked for the extension yesterday.

A spokesman for Eircom said negotiations were proceeding well and it was "just a matter of final approvals being obtained from third parties". It is understood that a number of regulatory issues need to be resolved, including approval from the Revenue for the Employee Share Ownership Trust to partner the Valentia Consortium in its leveraged buyout. The trust, which owns 15 per cent of the company, is restricted in terms of the type of investment that it can make without affecting its tax status. Valentia is expected to announce its firm intention to make an offer for Eircom later this week. The so-called rule 2.5 announcement will set in train the timetable for the offer. A formal offer document must be sent to shareholders within 28 days and they will have 21 days in which to respond. The full details of the bid will be contained in the offer document.

The announcement due this week will indicate that the Irish Takeover Panel has confirmed that the offer complies with the requirement under rule 16 of the takeover code that all shareholders are treated equally.