Babcock mulling sale of eircom’s retail arm

6 Mar 2006

Australia’s Babcock & Brown, which has accumulated a 23.6% stake in Irish incumbent eircom, plans to sell off the consumer division of the telco and spilt the operation into separate networks and retail units, if it is successful in its bid to take over the company. According to the reports in the UK Sunday Times, Babcock & Brown would also sell Meteor Mobile, the cellco bought by eircom from Western Wireless International last year for EUR420 million. According to one source close to the deal, ‘There’s no doubt you’re going to end up with two ownership structures in this scenario . . . [Babcock & Brown] is not an expert in retailing and would be more likely to want to only manage the network side’. The fund would however, keep a minority stake in the retail business, if necessary.

BabCock & Brown’s bold plan would need the backing of the telecoms regulator ComReg, although industry watchers say a separate networks business, with a guaranteed revenue stream, would have the financial power to raise and spend the EUR1 billion eircom has allocated for infrastructure developments over the next five years.

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