Eircom advisers approach private equity firms ahead of possible sale

11 Jul 2014

Bloomberg reports that Eircom’s financial advisers have approached some of Europe’s biggest private equity firms as Ireland’s former phone monopoly operator considers options for a sale or a return to the stock market, according to unnamed sources with knowledge of the matter. The Irish incumbent has taken on investment banks Goldman Sachs and Morgan Stanley to explore strategic financing options for the company, including a potential initial public offering (IPO) that is estimated to value Eircom at around EUR2 billion (USD2.7 billion). Three people, who asked not to be identified because the matter is private, suggest that some of the buyout groups already approached include Apax Partners, CVC Capital Partners and KKR & Co LP (KKR), with the aim being to form a consortium for the Dublin-based firm, which has changed ownership six times since 1999. The companies involved however, have all declined to comment.

In May this year, TeleGeography’s CommsUpdate reported Eircom chief financial officer Richard Moat as saying that the timing of a potential IPO and a return to the stock market is definitely not set in stone, and that market conditions will by and large determine when and if it stakes place. In an interview at the time, Mr Moat said that ‘a debt repayment extension secured by the telecoms group earlier this year meant that it’s not under any immediate pressure to pursue an IPO’. The CFO noted that early signs of a spike in IPO activity earlier this year seems to have now subsided, but declined to say whether the market’s apparent weak sentiment would either accelerate or delay its flotation. The telco’s single biggest shareholder is US investment giant Blackstone, which owns a 25% stake following Eircom’s restructuring and examinership in 2012. Other principal shareholders include Anchorage Capital, Bank of New York Mellon-owned Alcentra, and Silver Point Capital, but the PTO is still saddled with around EUR2.3 billion of debt (maturing in 2019). The IPO is intended to help further reduce debt.

Ireland, eir