It has set a price range of E1.48 $1.84) to E1.75 ($2.17) per share for its initial public offering. This would value the operator at up to E1.26 billion ($1.56bn).
The company said it plans to raise around E300 million ($372m) through a primary offer of new ordinary shares, and there will also be a further secondary offer of E531 million ($657.4m) of existing ordinary shares. This last tranche of shares are owned by the operator’s venture capital owners.
Eircom was taken private back in 2001 in a E3 billion ($3.72bn) deal by the Valentia consortium, whose stakeholders included Irish magnate Sir Anthony O’Reilly, financier George Soros, and Providence Equity Partners. The $657.4 million this group of investors is getting for its 70% stake (which remember cost it $3.72bn in 2001), hardly represents a stunning return on investment.
Around 30% of the company will be left in the hands of management and employees following the flotation.
The Dublin, Ireland-based operator added an extra incentive for investors with the news that it promising to pay a final dividend of E0.11 ($0.14) a share shortly after the listing is completed. Eircom ends its financial year in March.
In the first nine months of the year, Eircom made a net loss of E72 million ($89.2m), although that was exacerbated by high interest charges and historic depreciation costs. The company hopes to pay down E253 million ($313.6m) of its debt, which will reduce to about E2.1 billion ($2.6bn).
Eircom is Ireland’s dominant fixed-line group and has a market share of 80%. It does not own a mobile arm, after it sold its mobile phone interests to Vodafone Group, a move which co-incidentally triggered the VC takeover battle in 2001. Eircom now hopes to lease networks from Ireland’s existing operators to launch a virtual service under its brand.
The company will float on the London and Dublin stock exchanges and the shares are expected to begin trading on March 19.
This article is based on material originally published by ComputerWire
