Eircom opens its books

Eircom has opened its books to bidders Babcock and Brown and the Employee Share Ownership Trust (ESOT), the telecoms company announced today.

Due diligence arrangements have been put in place with Babcock & Brown Capital Limited and the ESOT.

The ESOT, which teamed up with Babcock and Brown to launch a bid for the company, is the second largest shareholder in eircom after Babcock, an Australian investment house.

Babcock has spent the best part of €700m acquiring a 28.8% stake in eircom, while the ESOT owns 21.8%, giving the two more than the 50% required to take control.

It is understood the two have put in an offer of €2.20 a share to eircom, significantly lower than the price Swisscom was prepared to pay for eircom just before Christmas.

An offer of €2.20 per share would value eircom, excluding its massive debt pile, at around €2.3bn.

"The independent board of eircom … confirms that it has entered into a bidding agreement with Babcock & Brown Capital Limited ("BCM") and … ESOT under which it has agreed to provide due diligence information on eircom to (both)," eircom said today.