eircom to pay €420m for Meteor mobile market re-entry

eircom has announced to the stock exchange its intention to acquire mobile phone operator Meteor for €420m.

The acquisition is intended to be funded by a rights issue at a minimum subscription price of €1.10 per eircom share (the "rights issue"). The rights issue price will be set when the prospectus is published, which is expected to be in late August 2005, and has been fully underwritten by Morgan Stanley and Goodbody Stockbrokers.

The acquisition is conditional upon the approval of eircom shareholders. The eircom employee ownership trust, which holds 20.9% of eircom’s total issued ordinary share capital, is to vote in favour of all resolutions at an extraordinary general meeting required to approve and implement the acquisition.

The acquisition is in line with eircom’s stated strategic objective of re-entering the attractive Irish mobile sector, which has among the highest average revenues per user (ARPUs) in Europe as well as attractive demographics. It is also expected to enable eircom to effectively double its addressable market by value to approximately €4bn.

Meteor, a wholly-owned subsidiary of Western Wireless International Holding Corporation, is Ireland's third mobile operator in terms of subscriber share with a subscriber base that more than doubled from 181,000 as of 31 December 2003 to 410,000 as of 30 June 2005.

Meteor had total revenues of €93.9m last year, with 10% share of the mobile phone market in Ireland. Eircom said today that it expects to be able to double this share and to grow ARPU over the next three to four years.

"In addition to accelerating pre-paid subscriber acquisitions, eircom will seek to drive growth by focusing on building share in the post-paid consumer, corporate and SME segments," the company said today.

Completion of the Acquisition is expected by the end of 2005, following appropriate regulatory approvals/notifications.

Commenting on the proposed acquisition, eircom chairman Anthony O’Reilly said: "Winning the bid for Meteor delivers on our promise to lead eircom back into mobile. The acquisition will transform the growth prospects for eircom, which is good news for our shareholders and for our employees."