eIsland unfazed by O'Reilly approach for Eircom

A spokesman for Mr Denis O'Brien's eIsland consortium, which is bidding for Eircom's fixed line business, said this afternoon…

A spokesman for Mr Denis O'Brien's eIsland consortium, which is bidding for Eircom's fixed line business, said this afternoon it is still "business as usual" for the group despite a rival approach led by Dr Tony O'Reilly and Mr George Soros.

The spokesman said that eIsland remained the only company which has made an indicative offer for the remainder of Eircom once its Eircell mobile unit is sold to Vodafone.

The O'Brien-led consortium has been conducting due diligence on Eircom for the past three months and have made an indicative offer of euro 1.10 per share for the fixed line business.

Earlier today a consortium led by Sir Tony O'Reilly confirmed it had approached Eircom over a bid for its fixed-line assets.

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Shares in Eircom reacted positively to the news of the consortium's interest. At 10.30 a.m. Eircom shares were trading 2 cents higher at euro 2.67, bucking the downward trend in the European telecom sector.

The consortium, which also includes a private-equity fund run by financier Mr George Soros, said it was conducting due diligence on the company and that talks were at an early stage.

Industry sources say the O'Reilly consortium is prepared to bid up to euro 2.7 billion.

Eircom is due next month to seek shareholder approval for the sale of Eircell to Vodafone in an all share deal worth about euro 3.5 billion.

Eircom has already been approached by Mr Denis O'Brien, whose eIsland consortium has outlined an indicative bid of euro 1.10 per share for Eircom's fixed-line and Internet businesses.

Mr O'Brien's potential hostile bid is the equivalent of around euro 2.4 billion. Eircom has signalled it considers the sum to be too low.

Eircom said it had no comment to make about the fresh bid possibility at this stage.

In the statement announcing the possible bid Sir Tony said the consortium had the necessary expertise in finance and telecoms to deliver an attractive offer to Eircom shareholders.

He said "We believe that a strong, developed and efficient telecoms infrastructure is critical to Ireland's competitive position and attraction as a business location".