Eisland ups Eircom fight

June 29, 2001 Posted: 0948 GMT

LONDON (CNN) -- Irish businessman Denis O'Brien's Eisland has stepped up the bidding war to buy Irish telecoms group Eircom, raising its offer to $2.55 billion.

EIsland said on Friday it had increased its offer to 1.32 a share in cash, valuing Eircom, Ireland's biggest phone company, at more than 3 billion.

That's five percent more than the 2.9 billion rival bid from billionaire Tony O'Reilly, through his bid vehicle Valentia, which is backed by financier George Soros and Goldman Sachs.

"This is the eighth proposal we have made for the business, and we think it is a knockout," O'Brien said. "We challenge the board of Eircom to do the right thing and recommend the best offer."

The fight to control Eircom, the former Irish telecom monopoly that was privatised in July 1999, has been ongoing since October last year before the Dublin-based company sold its wireless operator Eircell to Vodafone (VOD), the world's biggest mobile phone company, for $4.1 billion.

Eircom controls more than 80-percent of the fixed-line business in Ireland, and despite signs of a European-wide economic slowdown, the country still has the fastest growing economy in the 12-nation euro zone. 

O'Brien, who stepped down as chairman of Esat Telecom, the company he founded and built into Eircom's closest competitor, expressed surpise at the ongoing delays in exclusive talks between Eircom and Valentia.

"Our offer the last time was the highest offer, now we're a huge quantum higher than Valentia's offer," he told Irish state radio RTE.

"The board and the chairman have always assured me that the highest offer wins. They broke that rule the last time so it's going to be very interesting to see what the board do now."

Eircom on Monday agreed to extend the period of negotiation to July 2.

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