Eir share­hold­ers weigh trade sale in­stead of IPO

French telco Iliad de­nies spec­u­la­tion that it is dis­cussing a po­ten­tial pur­chase of Eir Eir records ninth con­sec­u­tive quar­ter of earn­ings growth for three months to June

The Irish Times - Business - - BUSINESS - MARK PAUL and JOE BREN­NAN

The hedge-fund own­ers of Eir are weigh­ing a pos­si­ble trade sale of the tele­coms group in­stead of a stock-mar­ket list­ing, which had pre­vi­ously been seen as the most likely sale op­tion and was mooted for as early as next year.

There was spec­u­la­tion in Dublin fi­nan­cial cir­cles this week that the own­ers of Eir, led by Anchorage Cap­i­tal, the big­gest share­holder with 42 per cent, were al­ready hold­ing dis­cus­sions about a po­ten­tial sale of the busi­ness to French telco Iliad.

The French group de­nied this yes­ter­day, how­ever, say­ing: “Iliad is not in dis­cus­sion about an ac­qui­si­tion.”

An in­dus­try source said a pos­si­ble link-up be­tween Eir and Iliad was be­ing dis­cussed by peo­ple in in­vest­ment banking and trade cir­cles. But the source added that Eir might not be seen as a neat fit with Iliad’s pref­er­ence to act as a mar­ket chal­lenger, whereas Eir is the clear mar­ket leader in Ire­land.

Can­not com­ment

Eir chief ex­ec­u­tive Richard Moat, speak­ing to The Ir­ish Times yes­ter­day af­ter an­nounc­ing full-year profit growth of 4 per cent, said he was aware of the mar­ket ru­mours that Eir’s own­ers were con­sid­er­ing a trade sale.

“But I can­not com­ment on such spec­u­la­tion,” he said.

When pressed specif­i­cally on whether the own­ers might run a process to sell Eir to a telco such as Iliad, Mr Moat said: “If there was [a process], that would be a mat­ter for the share­hold­ers and not an is­sue for man­age­ment.”

Mr Moat said the busi­ness was pro­gress­ing well from an op­er­a­tional stand­point and in terms of its rev­enue and grow­ing prof­itabil­ity, and that he was fo­cused on main­tain­ing that, and not on its fu­ture own­er­ship.

He de­scribed the pos­si­bil­ity of an ini­tial pub­lic of­fer­ing as a “the­o­ret­i­cal op­tion”, which would ap­pear to be a slight cool­ing of his po­si­tion from late last year, when he de­scribed an IPO as more likely than a trade sale.

As well as Anchorage, Eir’s share­hold­ers in­clude Sin­ga­pore sov­er­eign wealth fund GIC, at 20.6 per cent, and US fund David­son Kemp­ner, at 14 per cent.

Calls to Anchorage Cap­i­tal in New York yes­ter­day were not re­turned, while spokes­peo­ple for GIC in Sin­ga­pore could not be reached af­ter of­fice hours there.

Rep­re­sen­ta­tives for David­son Kemp­ner in New York did not im­me­di­ately re­spond to a call from The Ir­ish Times.

Mean­while, Mr Moat high­lighted that the three months to the end of Eir’s fi­nan­cial year in June com­prised its ninth con­sec­u­tive quar­ter of earn­ings growth, as it builds fi­nan­cial mo­men­tum. Full-year prof­its rose 4 per cent to €520 mil­lion, while rev­enues were steady at €1.3 bil­lion.

Mr Moat com­mit­ted to step­ping up Eir’s fi­bre-to-the-home roll­out of ul­tra-fast ser­vices to ru­ral house­hold­ers. The com­pany said it would “pass” 300,000 homes by De­cem­ber 2018, which will re­quire step­ping up the roll­out from 35,000 homes per quar­ter to 44,000 homes per quar­ter.

Chief fi­nan­cial of­fi­cer Huib Coster­mans said Eir’s in­ter­est bill sav­ings would reach €40 mil­lion an­nu­ally fol­low­ing the re­fi­nanc­ing some of its debt pile last year.

The com­pany also cut its costs by €26 mil­lion.

Eir said its broad­band con­nec­tions rose by 5 per cent to 896,000, while its base of tele­vi­sion sub­scribers rose by 17,000 to 71,000 cus­tomers.

It has 551,000 cus­tomers signed up to broad­band, a quar­ter of which it says are on so-called “triple play” ser­vices.

If there was a process to sell Eir, that would be a mat­ter for the share­hold­ers and not an is­sue for man­age­ment

– Richard Moat

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