British Telecom (quote: BT) is to pay about £1.5bn for Esat, Ireland's second largest telecommunications company, fending off a hostile £1.2bn bid from Norway's Telenor.
BT will offer $100 (£62) per Esat American Depositary Share or $50 per share, representing a 17.6 percent premium to the Telenor bid. The offer was recommended by the Esat board.
Esat closed at 93-7/8 on the US' tech-heavy Nasdaq exchange Monday. BT shares fell more than two percent to 1,186p in London in early trading on Tuesday.
Esat, a loss-making startup that offers mobile and fixed-line services, is in a good position as an alternative telecoms service in Ireland, BT said. "Ireland is an important and rapidly developing telecommunications market where Esat has been successful in establishing itself as the leading competitor to eircom," said BT CEO Peter Bonfield in a statement. "Much of this success can be attributed to (Esat Chief Executive) Denis O'Brien and the management team, who it is intended will continue to drive the business forward."
Esat is the second-largest fixed-line company in Ireland and the second in the mobile market behind eircom, with a 42 percent share of the GSM market. The company says it leads in the corporate Internet market.
BT already has a foothold in the Irish market through Ocean, a fixed line joint venture with the state-owned Electricity Supply Board.
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