Eircom set to reject O’Reilly takeover

Eircom tonight looked like rejecting a late take-over bid - even though it topped a previous offer currently being negotiated with a consortium spearheaded by media boss Sir Anthony O’Reilly.

The board of the former state-run company considered the intervention - from a rival group headed by telecoms entrepreneur Denis O’Brien at a specially-convened meeting today - but were understood to have decided that a vital 35% stake held in Eircom by Dutch and Swedish companies, had been legally committed to the O’Reilly bid.

Directors were believed to have concluded that the new offer would have to be higher still before the foreign shareholders were released from a previous undertaking.

Eircom has been involved in exclusive talks with Sir Anthony’s Valentia consortium for more than a week.

Earlier, Mr O’Brien described his intervention as a ‘‘knock-out,’’ and demanded its acceptance by the Eircom board.

The bid tabled by his E-Island group was five euro cents higher than theValentia one, and valued Eircom at £3bn.

Last month Eircom sold their mobile phone division to Vodafone, and thecurrent fight for control of the company affects their fixed lines andother telecoms services.

Eircom emerged as a new company after the flotation of the former Telecom Eireann state-run concern two years ago. But 500,000 small share holders have seen the value of their stakes slump severely since then.