Eircom shares will be priced in a range of €1.48 to €1.75 per ordinary share to value the equity of the group at €1,107 million to €1,258 million, the company said today.
In its prospectus published this morning, eircom said it expects to raise €831 million, with a primary offer to raise €300 million and a secondary offer of €531 million (at the mid-point of the price range).
Pricing is expected to be fixed around March 18th, 2004, and conditional dealings are expected to commence at about March 19th.
Eircom's employee share scheme, ESOT, will subscribe for new ordinary shares at the offer price. This will raise about €85 million of the overall €300 million raised in the primary offer.
When the flotation is completed, the ESOT will hold 29.2 per cent of eircom.
Eircom's chairman, Sir Anthony O'Reilly, said today that since it was acquired by the Valentia consortium which he headed, the company has become a more focused operation. "I am pleased to see eircom return to the markets as a major plc with a first rate board, strong management and a clear strategy," he said.
Eircom said it expects to pay a dividend of 11 cent per share in 2004 offering a yield of 6.8 per cent to investors.
"We said we would come back to the market when the time was right, and we believe the time is right now," eircom chief executive, Mr Philip Nolan said.
However, some fund managers said the lack of a fast-growing mobile phone business might put off some investors.
"The situation is that you are not buying into a growth story, as the company only has a fixed-line operation at the moment," said Mr Paul Gorman, a fund manager at Pioneer Investments in Dublin. "The yield will be the driving indicator that people will be looking at."
Eircom will begin a roadshow tomorrow to convince investors that its first, ill-fated listing is a distant memory. But the group promises rising revenues, growth margins and earnings before interest, tax, depreciation and amortisation, strong dividend and free cashflow yields and cost cuts.
Eircom, which has debts of around euro2.3 billion and made a net loss of euro72 million on sales of euro1.23 billion in the nine months to December 2003, has agreed with trade unions to cut staff to around 7,000 from 8,200 by 2008.
(Additional reporting by Reuters)