Battle for Eircom rages on

NEWS The future of Ireland's incumbent telco Eircom is no clearer today, with one possible bidder for the company - the Valentia consortium - denying it's on the verge of putting in a £2bn bid. The news flies in the face of earlier reports that Valentia was preparing to match e-Island's offer of £1.8bn for the telco. It was reported in the Financial Times and on an Irish news website that Valentia - which is headed by media magnate Tony O'Reilly - was going to stump up a similar amount. But a spokesman for the consortium has told silicon.com that these reports were unfounded - without completely ruling out the option of raising the stakes. The spokesman said: "We have three options open to us. One, to walk away. Two, do nothing. Three, match e-Island's bid." In any case, Valentia believes that Denis O'Brien's e-Island bid will not be successful, because he needs to grab 80 per cent of all shares in Eircom - a near impossibility, given who currently owns them. Valentia has a 15 per cent share through the backing of Eircom's Employee Share Ownership Trust, and has another 2.5 per cent share on top of that. O'Brien also lacks the backing of other shareholders, which include Comsource - the joint venture between Swedish and Dutch telecoms companies Telia AB and KPNQwest NV - which owns 35 per cent of Eircom. Valentia has until Monday 6 August 2001 to make a counter offer. It then has 14 days from the point of e-Island's formal offering document being received by Eircom to tie up the deal. If Valentia does make a counter offer, Comsource will sell its share to Valentia due to an earlier agreement between the companies. The spokesman said the Eircom deal could be completed at any time between now and Christmas.