O’Brien ‘crack team’ ponders Eircom bid
Tax exile O’Brien’s Digicel, the Caribbean and Central America-based mobile phone company, has made an approach about a possible takeover of Eircom.
Eircom, currently in talks with lenders to restructure €3.75 billion in debt, said at the weekend it had received an approach from a third party to help restructure its finances. Eircom has built up the significant debt burden after five changes in ownership in 10 years.
The company, majority-owned by Temasek unit Singapore Technologies Telemedia, did not say who the approach was from.
A spokesman for O’Brien said they did not comment on market speculation.
However, industry sources say Mr O’Brien has put in place a “crack team” to evaluate the possibility of taking over all, or some of, Eircom assets.
However, it is unclear if Mr O’Brien wants to take over the Eircom group, which has over 2.5 million fixed landline and mobile customers, or the group’s mobile services run by its eMobile and Meteor subsidiaries.
Mr O’Brien faces serious competition for the assets from other telecoms operators, such as Hutchison Whampoa, an Asian conglomerate which has also made contact with a co-ordinating committee of Eircom’s senior debtors in a bid to secure control of the operator. Hutchison already has the 3 network in Ireland and is very familiar with the market.
Mr O’Brien lost out in an attempt to buy Eircom back in 2001 to a bid led by his long-time rival, Tony O’Reilly. In 2005, Mr O’Brien also failed to buy Meteor when Eircom bought it.
However, Mr O’Brien now has more firepower, fuelled by the success of his Digicel operations. with annual revenues of €1.6bn, to secure the day if he decides it is a worthwhile investment.
The fate of any Eircom bid will be decided by its senior lenders. The bulk of Digicel’s senior mangers are Irish and their knowledge of the Irish market may swing things their way.
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