|
Esat rejects $1.6B bid
|
 |
December 1, 1999: 5:51 a.m. ET
Scandinavia's Newtel launches unsolicited offer for Irish telecom firm
|
LONDON (CNNfn) - Scandinavian telecom operator Newtel Wednesday announced an unsolicited $1.6 billion bid for Esat Telecom, Ireland's second-largest telecom company.
Newtel, which was created by the recent merger of national operators Telia and Telenor, is offering $36 in cash for each Esat share and $72 for each American Depositary share, valuing the company at $1.6 billion.
In a conference call with reporters, Newtel executives claimed the deal was not hostile. However, they did confirm that talks with Esat's senior management aimed at securing a recommendation to shareholders had not brought an agreement.
"ESAT's CEO [Denis O'Brien] was not ready, or interested in any offer in any circumstances. We made all the efforts to be friendly," said Newtel board member Terje Thon. He said further talks with Esat were not planned.
Esat issued a statement saying it noted the offer, but urged shareholders to take no action and await a further response.
Newtel's offer is at an 11 percent premium to where Esat stock closed Tuesday, and a 64 percent premium to the stock's trading average over the past three months. Esat shares have risen sharply in recent days.
Esat and Newtel jointly own Esat Digifone, Ireland's second-largest cellular network. In a statement, Tormod Hermansen, Newtel's CEO, said, "The Irish market is an important part of our international strategy and we wish to expand our presence in Ireland."
The unsolicited offer comes just days after Newtel announced plans to divest its other Irish asset, a 14 percent stake in the country's largest player, recently privatized Eircom.
Telia owned the Eircom stake and Telenor the Esat Digifone holding. The European Commission demanded one of the investments be sold as part of its conditions on approving the merger that created Newtel.
As part of the rationale for divesting Eircom, Newtel had cited its inability to exercise management control. Telia had agreed with the Irish government it would not take its stake in Eircom above 30 percent. 
|
|
|
|
|
|
Telia
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
