Eircom ‘open-minded’ on strategic options for future

Eircom hasn’t ruled out the possibility of being acquired in a trade sale, saying it remains open-minded regarding its future strategic options.

The former State-owned telecommunications group — which has seen its ownership change seven times since the 1980s — yesterday announced the appointment of Goldman Sachs and Morgan Stanley to “explore” strategic options for the company, “including a potential international offering and listing”.

Earlier this month, Eircom said that it was looking at a number of options to strengthen its financial position. Yesterday’s appointments follow on from the earlier coming on board of investment bank, Rothschild as independent financial advisor.

The terms of Eircom’s exit from examinership — with 40% less debt — at the end of 2012 effectively meant that many of the investors which effectively took ownership of the company could not keep long-term equity investments.

According to an Eircom spokesperson, the move to bolster its list of financial advisors doesn’t mean a decision regarding future ownership is pending.

Yesterday’s announcement, they said, was merely the start of a “roadmap” being put in place.

They added that the development shouldn’t be anticipated as meaning that a decision is imminent, or that the matter is accelerating towards a conclusion.

“It’s very early days,” they added, also saying the options for the company are “wide open”.

However, a third stock market listing in 15 years could value Eircom at €2.6bn and allow it to eliminate all of its debt, most of which has had its maturity date lengthened.

Bloomberg recently quoted one London-based analyst as saying that a business like Eircom doesn’t want to be owned by its creditors — currently around 80 lenders, led by private equity giant, Blackstone, control Eircom — and the best way out of that situation is to return to the equity market.