Australian investment fund Babcock & Brown is lining up French businessman Pierre Danon to take a prime role in Eircom if its €2.36 million approach for the former State telco is successful, according to informed sources. Arthur Beesley, Senior Business Correspondent, reports

Mr Danon is senior adviser to the investment bank JPMorgan, which is advising the Australians on their joint approach for Eircom with the worker-controlled trust that owns 21.5 per cent of the firm.

JPMorgan is also likely to co-finance a deal, along with Barclays, Credit Suisse and Dresdner Kleinwort Wasserstein.

Eircom's board met last night to discuss the approach for the company. Close observers of the process believe the go-ahead for due diligence is imminent.

Mr Danon was sacked last October as chief operating officer at Capgemini, the IT services group, after Le Figaro reported that he had been interviewed for the post of chief executive at the French hotel group Accor. He did not secure the job at Accor and, later, joined JPMorgan.

Months before that, Capgemini had itself poached Mr Danon from BT, where he was chief executive of the telco's retail division.

Some of the most senior figures in Eircom are considered likely to leave the company if it is sold, but the discussions between the two sides have not yet reached that point.

Some sources believe Mr Danon is likely to assume the role of chairman or executive chairman with a commitment to work at least two days each week with the company.

That assumes the departure of Sir Anthony O'Reilly from the chairmanship of Eircom, a post he has held since he led the takeover of the company in 2001 by the Valentia consortium. It is understood that Sir Anthony has no intention of staying on as chairman if there is a transaction and that he would consider his work with Eircom to be done in that event.

It is a given that Babcock & Brown and its bankers would be keen to install their own person in the dominant leadership position in Eircom.

A separation of Eircom's retail and networks division has been mooted. However, that would require Government approval in the form of an amendment to the "universal service obligation" that imposes a requirement on the company to provide the same level of telephone service at the same cost throughout the State.