Irish incumbent Eircom has shelved plans for an initial public offering that could have raised as much as €1bn (US$1.3bn) after concluding the strategic review it began in April.
In a statement Eircom said there were encouraging signs of positive…
Irish incumbent Eircom has shelved plans for an initial public offering that could have raised as much as €1bn (US$1.3bn) after concluding the strategic review it began in April.
In a statement Eircom said there were encouraging signs of positive momentum in its business and its decision had the backing of its key shareholders.
Eircom investors would prefer to “continue participating in the upside from the significant network investment made in recent years, which has only recently begun to manifest itself in the company’s operating and financial results”, the operator said.
Reports have suggested Eircom’s shareholders valued the business at €3bn (US$3.9bn) and had hoped to raise €1bn, but they could not convince potential investors that their valuation was justified.
Alongside an IPO, Eircom’s advisers – Goldman Sachs, Morgan Stanley and Rothschild – were also sounding out potential buyers. Operators Vodafone and Deutsche Telekom, and private equity firms KKR, Apax Partners and CVC were all reported to have discussed potential deals, but none of these talks resulted in an offer.
In late August Eircom won the consent of its shareholders, bondholders and lenders for a corporate reorganisation, which would have seen it incorporate in Jersey and be a tax resident in Ireland. This would have given Eircom greater flexibility to pay dividends to shareholders in the future if it chose to list.
It is yet to take up the reorganisation option but could choose to if it revisits an IPO further down the line.
An IPO this year would have come just two years after the group was taken over by its bondholders, which snapped it up from an administration process. That takeover saw US-based private equity firm Blackstone become Eircom’s largest shareholder.
