Babcock and Brown, ESOT make €2.4bn offer for eircom

Australian finance house Babcock and Brown has joined forces with the eircom Employee Share Ownership Trust (ESOT) to make a long-anticipated €2.4bn offer for eircom.

Babcock and Brown incorporated a new company - BCMIH - to implement the eircom offer. BCMIH is funded by Babcock & Brown, some of its affiliates and ESOT.

Once the takeover is completed, Babcock and Brown will hold 65% of eircom, with 35% in ESOT hands.

The two currently hold about 50.2% of shares between them.

Under the terms of the offer, eircom ordinary shareholders will be entitled to receive €2.20 in cash for each eircom ordinary share held. Eircom ordinary shareholders will also receive a second interim dividend of €0.052 per share for the financial year ended March 31, 2006, which is expected to be paid on June 26. Shareholders will therefore receive a total of €2.252 in cash per share.

The BCMIH offer values the entire issued ordinary share capital of eircom at €2.416bn.

Eircom's directors have indicated to BCMIH that they intend unanimously to recommend that eircom ordinary shareholders vote in favour of the bid.

Chairman Anthony O’Reilly said: "The independent directors believe that the cash offer, which recognises the successful implementation of eircom’s stated strategy, is fair and reasonable and is in the best interests of eircom ordinary shareholders, who will receive a substantial return on their investment since the eircom IPO in March 2004."