Private investors hoping to buy shares in the forthcoming Eircom flotation will have to invest a minimum of around €40,000.

The initial public offering (IPO) is primarily being targeted at institutional investors, but the Irish co-managers - Davy Stockbrokers, Merrion Stockbrokers and Goodbody Stockbrokers - will be offering shares to private clients.

The minimum investment amount should ensure that only experienced private investors buy shares.

In 1999, more than 400,000 small shareholders lost money in the Government-sponsored flotation of Telecom Éireann - as Eircom was then known.

It was taken private by Valentia Holdings in late 2001, which is now bringing it back to the market at a significant profit.

The marketing push is due to get under way later this week when the company publishes its prospectus.

A "road show" aimed at institutional investors is expected to last for around two weeks. When the roadshow is completed, the shares will be placed.

Investors will be told that Eircom's monopoly over the Irish fixed-line market and strong cash flow means that it can sustain a dividend policy equivalent to a yield of 6 per cent a year.

One Dublin broking source said yesterday that the dividend yield could be attractive to private investors - particularly to those with the ability to borrow money at a lower rate.

The number of shares that will be allocated to the Irish co-managers will not be disclosed until the prospectus is published.

However, sources said that the three broking house would expect to earn fees of around €1.5 million each for placing shares with their clients.

Overall, the advisers to the offering are expected to earn €100 million, with the bulk going to the joint bookrunners - Citigroup, Deutsche Bank, Goldman Sachs International and Morgan Stanley.

The prospectus will also detail the remuneration of the company's senior executives and the employee share schemes.

The chief executive of Eircom, Dr Phil Nolan, is reported to earn around €700,000 a year, excluding bonus and pension contributions.

The chief financial officer, Mr Peter Lynch, earns €450,000 as does Mr Cathal Lynch, the managing director of the retail division.

Mr David McRedmond, the commercial director earns €320,000.

The executives could have earned bonuses of up to 100 per cent of salary and received pension contributions of up to 50 per cent of salary.

Details of payments made to the executives in respect of last year's re-financing will also be disclosed.

They are reported to range from €7 million for Mr Nolan to €1.5 million for Mr McRedmond.

Details of a €1 million pension provision for Mr Con Scanlon, the general secretary of the Communications Workers Union and deputy chairman of the company will also be outlined.