Eircom to join markets at €1.55

Eircom is expected to join the Dublin and London stock markets today at a price of €1.55 per share after the board gave it a market capitalisation of €1.1bn last night.

A report in the Irish Times quotes market sources saying that the company had attracted a high degree of interest with demand twice as much as supply. The €1.55 price tag was at the lower end of a range suggested by the company.

The telecoms firm had earlier set an indicative price range of €1.48 to €1.75 per ordinary share for its flotation, valuing the company at about €1.26bn.

Irish institutions including: Bank of Ireland Asset Management, AIB Investment Managers, Irish Life Investment Managers, Hibernian Investment Managers and Pioneer Investment have thought to have taken up a fifth of the shares between them.

The dividend yield of nearly 7% is what is most likely to have attracted new investors. US investment houses known to have taken an allocation include Wellington and Putnam.

Conditional trade in the shares is to begin this afternoon. Around 70% of the company is being sold under the floatation, with 30% being retained by the Employee Share Ownership Trust.