Spotlight on national broadband plan as Eir sold again in €3.5bn transaction

Spotlight on national broadband plan as Eir sold again in €3.5bn transaction

Spotlight on national broadband plan as Eir sold again in €3.5bn transaction

Spotlight on national broadband plan as Eir sold again in €3.5bn transaction

The spotlight has fallen on the National Broadband Plan following Eir’s latest sale to a French investor in a deal which values the company at €3.5bn.

The Department of Communications made no comment what implications the Eir deal might pose for the plan but said the tender process for its management had advanced considerably. Final submissions are due before government early in the new year.

“This will ensure that the best solution for high-speed broadband is rolled out to the approximately 542,000 premises which will benefit from the State intervention,” a department spokesperson said.

Billionaire French telecommunications entrepreneur Xavier Niel, via two of his companies, has formally agreed to buy a 64.5% stake in Eir for an estimated €1bn.

The deal is subject to regulatory approval and is expected to complete during the first half of next year. It will value Eir at about €3.5bn.

Former communications minister and Green Party leader Eamon Ryan cautiously welcomed the Eir deal, saying it brings clarity to the company’s ownership and is preferable to it being owned by hedge funds, which are not usually long-term investors.

Mr Ryan said any expertise in introducing broadband in rural France that Mr Niel can bring to the Irish market could be very beneficial.

Mr Niel’s investment has also ruled out the prospect of another stockmarket flotation of Eir, with him understood to be viewing the investment as a long-term play.

Completion of the deal will also see current Eir chief executive Richard Moat leave the company, after nearly seven years, three and a half of which will have been as boss.

Mr Niel’s NJJ investment vehicle will own 32.9% of Eir, while French-listed telecom Iliad, 52% of which is owned by Mr Niel, will own 31.6%.

US hedge funds Anchorage Capital and Davidson Kempner Capital will remain as minority shareholders in Eir, the latter with an 8.9% stake.

Anchorage, currently Eir’s main shareholder, will see its stake reduce from 42% to 26.6%.

The Singapore-based wealth fund GIC, which has a 20.6% stake, will exit Eir on completion of the deal.

Iliad has the option of buying 80% of NJJ’s Eir stake in seven years, at a 12.5% discount to “fair market value”, which would give it a near 59% stake in the Irish telecom.

“We want to invest for the future of Ireland and hope to work closely with the Irish government and ComReg to ensure that people across the country have access to world-class super-fast fixed and mobile broadband,” Mr Niel said.

Calling Eir an “essential part of the Irish economy” Mr Niel said he had closely followed the Irish company’s “transformation” over the past five years.

“We are a long-term investor in the telecoms sector and bring global know-how to Eir.

“In our businesses in France, Monaco, and Switzerland, we have consistently delivered investment in infrastructure, while driving down prices for consumers,” Mr Niel said.

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