O'Reilly and Soros will clean up in £1bn Eircom float
By Dominic White (Filed: 27/02/2004)
George Soros and Sir Anthony O'Reilly are expected to almost treble their money when they sell their shares in Eircom, the Irish phone company that yesterday unveiled plans for a €1.6billion (£1billion) March flotation.
The Hungarian and Irish financiers were part of a consortium that injected €400m of equity into the group when it was taken private in 2001 after the shares collapsed.
The consortium is expected to offload all of its 71pc stake in a secondary offering that analysts say could be worth 1billion. It has already benefited from a special dividend last summer.
Sir Anthony is expected to stay on as chairman of the group when Eircom floats, even though the newspaper proprietor is thought likely to place all of his 5pc stake.
Eircom's flotation comes five years after its first, ill-timed foray on to the stockmarket and will be the first by a large European telecoms company since France Telecom's cellphone unit Orange floated in 2001.
Ireland's former state telecoms monopoly hopes to also raise €300m of new money through a primary issue of new shares on the London and Irish stock exchanges.
Eircom will use this money to pay down some of its debt, estimated to be €2.2billion. The employee trust that holds the remaining 29pc of the equity - worth about €300m - is expected to buy enough new shares to avoid dilution.
Eircom's previous flotation in 1999 remains a painful memory for thousands of Ireland's small investors, who lost millions when the telecoms bubble burst.
However, Eircom chief executive Philip Nolan said the group had cut costs to the point where it could offer an attractive dividend. Citigroup, Deutsche Bank, Goldman Sachs and Morgan Stanley are joint bookrunners.
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