Eircom has appointed Mr Peter Lynch as financial director to succeed Mr Malcolm Fallen, who resigned last year for personal reasons.
Mr Lynch (42) was the finance director of Adare Printing until he stepped down last June after leading a failed €140 million (£110 million) management buyout. The former stockbroker - who made in the region of €4 million from the subsequent sale of Adare to a rival management consortium - has already purchased 500,000 shares in his new employer at a cost in excess of €1 million.
Eircom shares fell 10 cents yesterday to €2.60 despite the news of the appointment of Mr Lynch - who is seen both as an aggressive and an entrepreneurial executive.
Eircom shares were dragged lower by Vodafone, the international mobile group, which has agreed to buy Eircell. Under the terms of the complex transaction, Eircom shareholders will get 0.9478 of a Vodafone share in respect of every two Eircom shares they hold.
Based on Vodafone's closing share price of £2.46 sterling (a fall of 4p) this works out at the cash equivalent per Eircom share of £1.17 sterling or €1.85.
Mr Lynch will be closely involved in the completion of the Vodafone transaction, which is due to close next March, according to Mr Alfie Kane, the Eircom chief executive.
Eircom management now want to reposition the company as an all-Ireland provider of integrated fixed, data, multimedia and e-commerce communications service. They will first have to deal with a bid for the fixed line business from eIsland, a consortium led by Mr Denis O'Brien.
The Eircom board has already rejected a €2.25 billion offer from eIsland, saying it significantly undervalues the business. Talks with the consortium are expected to re-open this week but Eircom are first demanding that eIsland agree to a standstill agreement before being provided with further confidential information.
Mr O'Brien is reluctant to reduce his room to manoeuvre and sources say that to date he has declined to agree to even a three-month standstill that would run to the end of this financial year in March It is expected that Mr O'Brien will have to increase his bid if he wants to secure the fixed line business. Sources close to the consortium point out that the €2.25 billion offer is now worth 20 per cent more than when it was tabled last year, if the fall in the value of telecom stocks across Europe is taken into account.
Mr O'Brien will be under a certain amount of pressure to move quickly as the two biggest shareholders in Eircom will be free to sell their stakes from the end of this month.
KPN has already been in talks with a consortium led by businessman Mr Paul Coulson to sell its stake and the possibility of talks being re-opened has not been ruled out.
