Eircom sticks with Valentia

July 1, 2001 Posted: 2202 GMT

LONDON (CNN) -- Irish telecoms operator Eircom has said it intends to continue with a bid from the Valentia consortium, despite a new offer from Denis O'Brien's Eisland.

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

The battle for control of the former Irish telecom monopoly has been ongoing since October last year, before the Dublin-based company sold its wireless operator Eircell to Vodafone, the world's biggest mobile phone company, for more than $4 billion.

Eircom chairman Ray MacSharry said in a statement: "The Independent Directors of Eircom intend unanimously to recommend that shareholders accept the Valentia offer, because we believe... that it is in their best interests."

Eisland's offer is 5 percent more than the 2.9 billion being offered by billionaire Tony O'Reilly through his bid vehicle Valentia, which is backed by financier George Soros and Goldman Sachs.

Irish state broadcaster RTE earlier said Eircom's board believes that shareholders KPN and Telia AV, who between them hold a 35 percent stake in Eircom, are bound by an irrevocable undertaking to sell to Valentia.

But Eisland says a formal offer from Valentia has not yet been lodged, and "any irrevocable agreements pledged to date have not yet taken

effect."

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

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