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Saturday 3 December 2016

Blackstone to sell 25pc holding in Eircom

PRIVATE equity firm Blackstone is to sell a 25pc stake in Eircom to hedge fund Anchorage Capital, according to reports.

However, it is understood that Blackstone will retain a 5pc stake in the company, according to a report by Reuters.

The move comes after Blackstone rejected a €3.3bn offer for Eircom, which it considered low.

The telco, controlled by a suite of global private equity groups, confirmed earlier this week that it had received a non-binding approach for the business that gave it an enterprise value - which includes debt and equity - of between €3.2bn and €3.3bn.

bidder

Eircom had just over €2.2bn of net debt at the end of 2014.

"While the bidder was very credible, the board believed that, with the business reaching an inflection point, the indicated price range undervalued the group. The matter is therefore not being progressed," said Eircom in a statement.

A spokesman for Eircom declined to comment beyond that statement.

In 2012, Eircom was the subject of what was Ireland's biggest ever examinership. It emerged from that process under the control of lenders and with its debt slashed from about €4bn to €2.4bn.

Last year, Eircom was readying a stock market flotation that would have placed an enterprise value of €3bn on the business. That would also have marked the third time its shares would have been listed on the stock market. Eircom had planned to use €1bn of the flotation proceeds to cut its debt. At the time, that would have knocked about €40m from its annual interest bill.

But the flotation plan was shelved after Eircom was unable to convince potential shareholders that the business was worth as much as its existing owners thought it was.

The decision not to hit the stock market also prompted then chief executive Herb Hribar to announce his departure from the company just over a week later. He has been succeeded by chief financial officer Richard Moat.

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