Eircom takeover bid ‘only option’

THE Eircom takeover bid from Singapore Technologies Telemedia is the only game in town, according to union representing the majority of workers in the former state monopoly.

The Communication Workers’ Union of Ireland (CWU), the main trade union for the telecommunications sector here, has taken a significant stance on the future ownership issue at Eircom. In its opinion, the interest being shown by Singapore Technologies Telemedia (STT) presents the “only credible option” for the future of the former state-owned telco.

The sale of Eircom has been on the agenda for a number of months and the company’s parent company, Babcock & Brown Capital (BCM), has already told shareholders that it has been considering “several proposals”.

The CWU came out in condemnation of one of those proposals: the mooted €95 million offer by the TaemasBridge consortium, led by former Babcock & Brown executive Rob Topfer and ex-Eircom chief executive Rex Comb.

The CWU said that it was “strongly opposed” to that bid and “appalled” that Eircom was being used “as a financial football by private equity institutions”.

Since then, a number of potential bidders have been speculated upon – British private equity firm Permira, rival houses CVC and Arcapita and Irish telecommunications entrepreneur, Sean Melly included.

Yesterday, however, the union seemed to put its support wholeheartedly behind STT. CWU general secretary Steve Fitzpatrick said it would put Eircom in the hands of an owner that fully understands the telecommunications sector.

“The CWU believes very strongly that Eircom needs a new owner which understands the industry and views the company as a long-term investment. To that end, we note the interest of STT and, more importantly, the support given to that STT approach by the Eircom ESOT. Given that STT is a major industry player, it presents the prospect of an owner that understands the industry, new technologies and who, in our view, is the only credible option given the stated alternatives,” Mr Fitzpatrick said.

“The CWU has noted that some of the other prospective suitors seem to have become interested or entered the process since the union accord on a cost saving agenda was agreed between the company and the four constituent unions,” the CWU added.

Mr Fitpatrick further added: “The members’ sacrifices have not been made to further enrich private equity groups or venture capitalists. Any attempts by the present owners of Eircom to use the recent accord to increase the asking price for their shares will be fully opposed by the union in whatever way is necessary.”

Meanwhile, an Eircom spokes-person said the company had no comment other than the matter was an issue for shareholders.