Eircom comes back to market

Cheaper than the first time...

Eircom on Friday will have its second IPO on the Dublin stock exchange - at half the price of its first offering five years ago during the telco boom.

The company first floated in 1999 but was bought out in late 2001 by a consortium led by George Soros and Sir Anthony O'Reilly. Shares are likely to trade at the low end of the €1.48 to €1.75 price range set by the company's advisers and will be aimed at institutional investors.

When the telco was privatised five years ago, most of the Irish population flocked to buy it at €3.90.

And shareholders, expecting a bonanza similar to that produced when BT was privatised, were bitterly disappointed by the collapse of the boom within months of the IPO.

This time, the company will be raising €300m in fresh equity and its backers, including Soros and O'Reilly, will be disposing of €531m worth of their shares.

Eircom is heavily indebted but is promising to maintain a 7 per cent dividend. It is aiming to cut its headcount from about 8,300 to 7,000 during the next three years or so. It hopes to benefit from a rollout of broadband because internet usage in Ireland, at 44 per cent of the population, is high.