Eir back in play as investor set to take control
Eir — which has had seven owners since the late 1990s and shelved plans for a second IPO in 2014 — has ultimately been owned by its senior lenders for the past four years.
New York-based Anchorage is already Eir’s main shareholder, with a 36.4% stake.
The latest ownership move is down to a minority shareholder, US hedge fund York Capital, looking to sell its 9.8% shareholding.
It is understood that York does not view Eir as fitting with its investment rationale of high-yield/high-risk targets any longer.
Its stake is set to be divided between Eir’s other three existing investors: Anchorage; Singapore’s sovereign wealth fund GIC, which owns just over 16%; and hedge fund Davidson Kempner, which currently owns nearly 12% of Eir.
It is not known what price each investor will pay for their share of York’s stake, or what allocation of the shareholding each will take.
The realignment of current ownership, however, is reliant on regulatory approval and the matter is being investigated by the Competition and Consumer Protection Commission (CCPC).
That is because the change to Anchorage’s shareholding in Eir would likely see its voting rights — currently between 40% and 50% — breach the 50% mark and give it control of the company. The CCPC is set to make a ruling on the matter by the end of November.
Eir said little yesterday other than to confirm that “entities managed by Anchorage Capital Group intend to increase their equity stake in the Eir Group by purchasing shares from an existing shareholder”.
It said that “the continuing support of shareholders is a positive endorsement of the group and its strategy”, and that the ownership change will result in no change in Eir’s strategic direction.
“Following the proposed transaction, which we believe is conditional upon satisfying certain obligations, entities managed by Anchorage Capital Group will remain as Eir’s largest shareholder,” stated Eir.
Anchorage bought its original stake in Eir from US private equity group Blackstone.
Last April, Eir — which rebuffed a €3.3bn takeover approach from an unnamed source last year — chief executive Richard Moat said the group’s shareholders held no intention of revisiting an IPO of the business.
Last month, he said there was no sign of any major change in Eir’s ownership over the next two years.
Earlier in the summer, Eir raised €500m via a bond sale, with part of the funds going to pay off an element of its still sizeable near €2.3bn debt mountain. The bond sale raised €150m more than was originally targeted, due to investor demand.
Last month, Eir reported a 4% increase in annual revenues to over €1.3bn and underlying growth of 5% in earnings before interest, tax, depreciation, and amortisation to €505m.
It was the first time Eir, formerly known as Eircom, saw annual revenue growth since 2008.
Hailing that as a milestone and a pivotal year, management said the company was beginning to make inroads into the retail broadband market.
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