Australian court clears path for STT to acquire Eircom

THE takeover of Eircom by Singapore-based STT Communications has been formally approved by the Federal Court of Australia.

This decision keeps the deal on course for conclusion early next month.

The court approval follows on from Tuesday’s shareholder vote, where over 99% of shareholders of Eircom Holdings, the Australian parent of the telco, voted in favour of the deal.

The news was welcomed by Eircom management, which said it is “vital” the company “transforms itself” into a modern telecommunications company and ensures it “not only competes successfully but also actively contributes to the re-establishment of Ireland’s international competitiveness”.

Eircom chief executive Paul Donovan said: “This week’s developments are important milestones towards the conclusion of the transaction in early January.”

The nearly finalised deal is set to see STT Communications pay around €140 million for Eircom in a mixed cash and share transaction. The deal will usher in the company’s fifth owner in just over a decade.

Meanwhile, STT has moved quickly to state that it is viewing its involvement with Eircom as that of a long-term investor and said that its chief aim will be to “build sustainable businesses”. “In the new year, STT will be working closely with the management and employees of Eircom to determine a sound vision and strategy for the future,” added STT president Lee Theng Kiat.

He said the new owners would be looking for the support of “all stakeholders” — including the Irish Government; telecommunications regulator ComReg, Eircom management and the employee share ownership trust — to transform Eircom into an efficient operator “that can contribute to the further development of Ireland’s telecommunications industry”.