The consortium led by Mr Denis O'Brien has raised its bid for Eircom to the equivalent of more than €1.30 per share to secure the backing of the Eircom board. The directors of Eircom met for four hours last night to consider final offers from eIsland and the rival Valentia consortium headed by Sir Anthony O'Reilly.
Valentia also increased its bid from €1.221 per share, but reliable sources said last night that eIsland remained ahead. However, Valentia has the support of the Employee Share Ownership Trust, which owns 15 per cent of the company.
The board is expected to recommend the highest offer on the table. If Mr O'Brien's consortium has outbid Valentia, it could expect to get a recommendation from the board to shareholders to accept its offer.
No decision was taken at last night's meeting. Eircom's advisers sought further information from both bidders and the meeting will reconvene today.
Mr O'Brien has increased his offer from €1.241 to €1.246 per share, but he has also offered a warrant which his advisers, J.P. Morgan, have valued at 5.8 cents. This brings the bid to the equivalent of €1.304. The warrant will allow exiting shareholders to share the proceeds of any subsequent sale or flotation of Eircom; eIsland will also allow shareholders take cash instead of the warrant. The cash offer will be worth 4.6 cents.
Two US banks which had been tracking Eircom - Kohlberg, Kravis & Roberts and Blackstone - did not lodge bids by yesterday's 4.30 p.m. deadline. IIU, which is controlled by Mr Dermot Desmond, also did not bid, but all three could yet re-enter the race.
