It's a familiar story. A national telephone company in a small country on the edge of Europe being fought over by US leverage buy-out (LBO) houses.

This time it is the turn of Telekom Austria to be courted by rival US corporate financiers Kohlberg Kravis Roberts & Co and Providence Equity Partners. The LBO houses tripped up over each other in pursuit of Eircom, with Providence leading the winning Valentia Consortium.

Now they are going head to head over the Austrian operator, which is 29.8 per cent owned by Telecom Italia. That, however, is about as far as the parallels go. Telekom Austria is expected to be sold for around €10 per share, or €1 more than its November 2000 flotation price of €9 per share.

Telekom Austria shares have not been immune to the global disenchantment with the telecoms sector and have traded below their issue price almost from day one before bid speculation pushed them back up earlier this month. If the company is taken out at this level it will be good news for any small Austrian shareholders who otherwise would be facing a less painful version of the disaster that befell the 500,000 Irish punters who bought into Eircom.

The Austrian telco's shares held up better than its Irish counterparts for a number of reasons not least that the valuation bubble had already burst when it went to market. Also, unlike the Irish Government, the Austrians decided to hold onto a significant chunk of the company - 47.8 per cent - which effectively underwrote the share price and made sure their citizens didn't take the sort of bath that Irish punters did. Almost makes you want to live in Austria.