Eir finalises Setanta Sports Ireland takeover deal

Eir has denied it is putting itself back in the shop window despite agreeing a deal to buy Setanta Sports Ireland and saying it is looking at more acquisitions likely to boost its value.

While heavily mooted for a number of weeks, the deal seeing the diversified telecommunications group, formerly known as Eircom, buy Setanta Ireland for an undisclosed sum was only confirmed yesterday.

Recent reports suggested Setanta is worth around €20m. It ranks as Eir’s largest acquisition since buying the Meteor mobile network in 2005.

The deal will see Eir move into the content ownership space on its Eir Vision television service and other platforms as it looks to close the gap on rival operator Virgin Media (formerly UPC Ireland), and boost its standing in the ‘quad-play’ (mobile, fixed-line, television, and broadband internet) arena.

The acquisition is reliant on competition approval and is expected to be finalised by late March/early April.

While existing Sky and Virgin Media customers who have Setanta will still be able to access it, Eir will have the ability, via ownership, to entice new customers, looking for the service, via a range of potential ways including availability on mobile devices and price offerings.

This will be explored further, once the deal concludes.

Eir chief executive Richard Moat yesterday called the Setanta deal a “game changer”, but said it is not necessarily the final development as management looks to expand the group.

He said that management keeps all growth opportunities under constant monitoring and that Setanta is not the only takeover Eir could make if it so wished.

However, he also denied that such deals have anything to do with fattening Eir up for another potential sale, saying that nothing of that note is currently a prospect and management is trying to enhance its across-the-board offerings for new and existing customers.

The company is striving to be the leader in ‘quad-play’ customers and has 65% of its customer base using two or more of its services — a strong indication of a loyal subscriber base.

Last year was rife with speculation about the future ownership of Eircom, as it was, with IPOs and trade sales rumoured, and one approach being turned down, before management scrapped such plans.

Mr Moat reiterated yesterday that Eir’s shareholders remain happy with the company and are long-term investors. The company is nearly 40% owned by New York-based hedge fund operator Anchorage Capital.

Mr Moat said any deal like the Setanta one will add value to Eir and would make it easier for any potential capital markets action should investor and management thinking head in that direction.

Meanwhile, yesterday also saw Virgin Media formally conclude its purchase of TV3.