Babcock & Brown makes an approach to Eircom

Babcock & Brown makes an approach to Eircom

	Published : Thu, 23 Feb 2006 04:20 By : Richard Owen Print this Story

SYDNEY: Australia's Babcock & Brown Capital Ltd. has confirmed it had approached Irish phone firm Eircom Group with a takeover offer and that it had increased its stake in the latter company to 18 per cent.

Eircom had revealed Tuesday it had been approached by the Australian investment fund, but it was not sure whether it would lead to any firm deal.

Babcock & Brown Capital is managed by investment and advisory firm Babcock & Brown Ltd. It is listed on the Australian Stock Exchange and had raised A$1 billion (423 million pounds) to invest in domestic and overseas companies. The two entities had bought 10.8 per cent and 1.7 per cent stakes respectively in Dublin-based Eircom in October last year.

Babcock & Brown Capital's executive director Robert Topfer said the discussions are preliminary in nature and the firm is awaiting a response from Eircom.

This is the second approach the former public sector phone company had received in the last four months. In November, Swiss communications major Swisscom said it is in talks to buy the company, reportedly at a price between 2.4 euros and 2.5 euros, but the Swiss government blocked the acquisition plan.

Eircom, chaired by Sir Anthony O'Reilly, chief executive of Independent News & Media, publisher of The Independent, had reported an unexpected fall in core earnings in its third quarter, but it claimed growth in its new Meteor mobile unit. Originally floated by the Irish government in 1999, it was taken over in 2002 by a consortium led by Sir Anthony and including Soros Fund Management and Providence Equity Partners. It was refloated in 2004 with the consortium selling bulk of its holding. An employees' trust with 20.9 per cent stake, is the largest shareholder in the company now.

It had sold its mobile phone business to Vodafone Group Plc. in 2001, but returned to the wireless market last year buying the Meteor mobile phone business from Western Wireless Corp. for 420 million euros. It had then sold 313 million shares to existing shareholders to raise the amount.

Analysts estimate consumers in Irish market spend nearly 50 per cent more on mobile phone calls that in the U.K. or Germany or Italy.

Eircom shares rose 1.9 per cent at 2.2 euros, valuing the company at 2.3 billion euros.