The eircom board today acknowledged Mr Denis O'Brien's new offer for the entire issued share capital of the company.
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Mr Denis O'Brien
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In a statement to the Dublin and London stock exchanges the company said: "Any such offer would be preconditional on due diligence by eIsland and the disposal of Eircell."
eIsland is a consortium led by Mr Denis O'Brien.
The statement stressed discussions between the parties about the approach are at a preliminary stage.
"There can be no assurance that these discussions will result in an acceptable, or any, offer for the company," the statement added.
This morning's Irish Timesreported Mr O'Brien has offered to buy Eircom's Internet and directory businesses as well as the fixed-line operation. The eIsland consortium is belived to be offering euro 1.10 per share for eircom's remaining assets after eircell is sold to Vodafone.
However, a spkesman for Mr O'Brien told ireland.comtoday that the 1.10 per share offer was speculation and no firm offer would be set until due diligence is completed.
If the latest offer is accepted it could mark the break-up of the former state company which has agreed to sell its mobile division Eircell to British mobile giant Vodafone.
The news caused a mixed reaction on the Dublin stock exchange today. At noon eircom shares were two cents lower at euro 2.54 in a depressed telecoms sector.
Industry sources also remain sceptical about eIsland's ability to manage a company as operationally complex as eircom.
The European telecom sector is reeling today from the news that France Telecom has cut almost euro 10 billion off the valuation of its mobile subsidiary Orange, which will be floated next week.