Vodafone to Buy Eircom`s Wireless Unit in Ireland for EU4.5 Bln - 500 Beiträge pro Seite

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Vodafone to Buy Eircom`s Wireless Unit in Ireland for EU4.5 Bln
By Thomas Molloy and Brian O`Neill

Dublin, Dec. 21 (Bloomberg) -- Vodafone Group Plc agreed to buy the mobile phone unit of Ireland`s Eircom Plc for about 4.5 billion euros ($4.12 billion) in stock and debt to gain the lead in Europe`s third-fastest growing cellular market.

The world`s largest mobile phone company will give Eircom shareholders 0.9478 Vodafone shares for every two held to acquire the Eircell wireless unit. The acquisition is expected to be completed in the first half of 2001, the companies said in a statement on the Regulatory News Service.

Vodafone, which yesterday agreed to buy part of Japan Telecom Co. for $2.2 billion, is expanding even as rivals such as British Telecommunications Plc scale back plans because of rising debt. Last month, Vodafone agreed to buy stakes in Swisscom AG`s mobile unit and to invest in China Mobile (H.K.) Ltd.

``Vodafone is acquiring the market leader in the Republic of Ireland, adding more than 1.2 million customers to its base,`` said Julian Horn-Smith, chief executive of Vodafone Europe, in the statement. ``Eircell complements Vodafone`s existing presence in Northern Ireland and enhances its European footprint.``

Eircom shares were unchanged at 2.85 euros in Dublin today and have lost a third of their value this year. They were first offered to the public last year at 3.9 euros each, when the Irish government sold its 50 percent stake to institutional and private investors.

Shares of Newbury, England-based Vodafone fell for a third day today, slipping 3.5 pence, or 1.4 percent, to 241.5p.

Vodafone, which has more than 65 million customers worldwide, will gain 60 percent of the Irish cellular market. Esat Digifone has the remaining 40 percent.

A third operator, Meteor Communications, has yet to begin offering services following more than two years of legal wrangling. The company has said it will start service in the first quarter.

Ireland`s wireless phone market is growing the fastest among all European countries except for Malta and Germany.

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By RICHARD CURRAN, Business Editor - IRISH INDEPENDENT 21/12

EIRCOM`S 400,000 shareholders are poised to get some payback on their investment as the company prepares to announce the sale of its mobile division to British giant Vodafone today.

The deal will be the culmination of over two months negotiations between the companies and will be the biggest transaction in Irish corporate history.

The sale is believed to value Eircell at £3.5bn (euro 4.5bn), which will be passed on to shareholders, less the value of any debts Eircell currently has.This is a lot less than the £4bn (euro 5.1bn) price target the companies struck when they first agreed a deal in principle in late October. But the sharp fall in the value of Vodafone shares since then forced the mobile giant to push for a cheaper price.

If the shareholders approve the deal at a special extrraordinary general meeting to be held in January, they will receive a once-off special dividend of £1.59 (euro 2.03) for every Eircom share they own.

This will be paid in the form of shares in Vodafone rather than cash. This means that someone with 1,000 Eircom shares will receive around 495 Vodafone shares. They will still retain their 1,000 Eircom shares, but they will be worth less once the deal has gone through. One advantage for shareholders is that if Vodafone shares recover in the weeks ahead, the value of this deal to them will go up.

However, the time it has taken to put this complicated acquisition together may have resulted in the former state telecommunications
company receiving close on C600m less for Eircell than it would have a few months ago.

Time is running out for Eircom to announce the deal, and last night the overwhelming expectation was that it will be announced today. Negotiators for both sides worked into the night to complete it.

Eircom shares were unchanged yesterday, closing at euro 2.85. If Vodafone shares do not rise in value, shareholders will need another euro 1.87 from other sell-offs if they are to get back the
euro 3.90 most people paid for shares when the company floated in July 1999.

Today`s expected announcement comes at a time when world stock markets are falling. The Dow Jones index in New York was trading 2pc lower by yesterday afternoon, while the Nasdaq was down by over 7pc.

Telecommunications shares in particular have fallen heavily. Vodafone shares fell 3.5pc in London yesterday to close at stg£2.51. They were trading at stg£2.80 when negotiations began with Eircom.

Other big names in telecommunications share prices fall yesterday including Telekom Austria, which fell to an all-time low. Vodafone,
the biggest mobile telecommunications company in the world is valued at stg£135bn on the stock market.

Shareholders will also be watching the negotiations between Denis O`Brien and Eircom for the sale of the fixed line business over the coming weeks. Mr O`Brien has so far offered euro 1.00 per share

END

At 12.19pm today it was announced that Eircell was sold to Vodafone for euro4.5bn

IRISH TIMES 21/12