Swisscom's state owners yesterday struggled to defend their decision to ban all foreign acquisitions, including Eircom, as signs increased of an impending clash at the Swiss telecoms group.
Speculation mounted about an imminent meeting of Swisscom's board and the possible resignation of leading staff, including Jens Alder, chief executive.
Swisscom officials declined to confirm the timing of any meeting, but said the new circumstances made clarification urgent.
The speculation followed Friday's statement by the Swiss government, which owns 66.1 per cent of Swisscom, that it would oppose attempts by the company to break out of its limited home market by buying counterparts abroad.
Swisscom has been in takeover talks with Eircom and also been linked with the purchase of TDC in Denmark. The company had been expected to table a bid for Eircom this week. News that the deal was in jeopardy sent Eircom's shares down by 16 per cent on Friday.
Eircom has so far held back from comment on the development, aside from noting Swisscom's position. The Eircom board is also expected to meet over coming days.
Hans-Rudolf Merz, Switzerland's finance minister, and Christoph Blocher, justice minister, tried in separate Sunday newspaper interviews to justify the ban, which has been met with astonishment in Switzerland and abroad.
Mr Merz, from the centre-right Radicals, claimed Swisscom should have known of the government's reluctance to back any moves threatening its steady dividend stream. Mr Blocher, driving force of the ultranationalist Swiss People's party, said the latest events underlined the need to remove Swisscom from state ownership as it ambitions were incompatible with its role as a dependable revenue source for the state.
The ministers' claims that Swisscom should have been aware of the government's position appeared unconvincing, given the group's attempts in recent months to identify acquisition targets. Even before matters came to a head over Eircom and TDC, the Swiss group was poised to buy Cesky Telecom in the Czech Republic, before being outbid by Telefónica of Spain.
A Swisscom official noted that the group's current strategy document, covering the period 2002-05, makes provision for foreign deals.
