Venture capitalists holding 52 million shares in Eircom will be free to sell their interest from Monday following the expiry of a 180-day lock-in period.
Providence Equity Partner, Soros Private Equity and Goldman Sachs originally invested in Eircom when it was taken private by the Sir Anthony O'Reilly-led Valentia consortium.
At the time Eircom returned to the market last March, the shares were held by Morgan Stanley to ensure a stable position in the stock following its flotation.
The shares could only have been sold into the market if the price exceeded the €1.55 flotation price, which it did not. After 30 days, they reverted to the venture capital groups.
The 7 per cent stake in the former State telecoms operator has been seen as an overhang on the market, depressing the share price since then, as the venture capital firms were not seen as long-term investors in the stock.
The shares have only recently started trading above the €1.55 level at which they were floated. Last night, they closed at €1.56, valuing the stake at just over €81 million.
Analysts yesterday said that it was likely the holding would be sold, provided the VC firms could achieve a price of more than €1.55. That would appear to mitigate against any sudden dumping of the stock on the market.
Dolmen Securities fund manager Mr David Beaton said the one thing that might prevent a quick sale would be a mobile initiative.
Eircom's chairman, Sir Anthony, in a trenchant defence of the company at its annual meeting this week, said that it would have a clear strategy on how to enter the mobile market by early next year.
"If the venture capital companies feel there is the potential for a mobile venture, they may sit tight," said Mr Beaton.
However, he felt the continued level of capital expenditure required on the existing network, the costs of servicing debt and the uncertain state of equity markets would see them sell sooner rather than later.
Merrion Capital analyst Ms Bríd White said: "They will be keen to take their money out. Eircom is not likely to yield the sort of return venture capital companies are traditionally interested in."
