Vodaphone Buys Eircell For $3.8m
Vodaphone rounded off
its Christmas shopping spree yesterday with the acquisition
of Eircell, the mobile phone subsidiary of Eircom,
Ireland's former state telecoms operator. Eircell
is the country's largest mobile operator, and the
deal, at $3.8bn (4.25 bn euros), is Ireland's largest
corporate takeover. Vodafone will also assume E250m
of Eircell debt. The all-share deal has
been approved by Eircom and goes for approval to a
meeting of Eircom shareholders in March. If approved,
each Eircom share will attract a demerged share in
Eircell; Vodaphone will then offer 0.95 of one of
its own shares in exchange for two Eircell shares. The deal is equivalent
to 1.91 euros per Eircom share, on the basis of Wednesday's
Vodafone closing price of 245 UK pence, rather less
than had been expected due to the recent fall in Vodaphone's
share price. 500,000 people bought shares in Eircom
at 3.90 euros when it was privatised, and they have
since declined by 30%. Also yesterday, Eircom
rejected a share offer worth 1 euro per share for
its residual fixed line business from e-Island, a
consortium led by Denis O'Brien, the former chairman
of Esat. Eircom's residual new media business is said
to be worth about 0.40 euros, so that shareholders
are not really gaining from the Vodaphone offer, even
judged against the current, reduced price of Eircom
shares .
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