Swisscom surrender hits Eircom share price

SWISSCOM caved into the Swiss government yesterday when it granted its controlling shareholder free rein to decide its future strategy, further dampening hopes that it would resurrect its bid for Eircom.

The government, which holds a 66% stake in Swisscom, said that it had decided to draw up the company's strategic goals for the next four years and reiterated it would block any foreign acquisitions. It added that Swisscom management had agreed to the decision.

Eircom shares lost more ground yesterday, shedding 1% to €1.94, as investors clinging to hopes of a successful takeover lost heart and sold out. The share price now languishes over 20% below the €2.45 peak reached when news of Swisscom's takeover approach was made public.