Cablelink's new owner will be either the US group, NTL or Irish group Esat Telecom - which has teamed up with Charter Communications of the US. The five bidders for Cablelink have submitted fresh bids for the group and an announcement on the winner is expected either today or tomorrow.
At least one of the initial bids for Cablelink, which were lodged last Friday, is believed to have exceeded £450 million (€571 million). NM Rotschild, the investment bank handling the sale, asked all five of the bidders to lodge further bids by 12.30 p.m. yesterday.
This is understood to have been because some of the original bids had included certain conditions and the bankers wanted all the bids on the same basis. The investment bankers had discussions in Dublin yesterday with representatives of Government officials and the companies selling Cablelink - Telecom Eireann and RTE. Cablelink supplies services to 360,000 homes in Dublin and Galway.
It is not clear whether the highest bids received in the initial round were based on certain conditions and were lowered in the final round. In any event the price now looks set to be well in excess of £400 million and possibly close to £500 million.
The fact that two bidders - NTL and the Esat group - are still in the running suggests that at least one of the final bids was conditional. One of the bidders - possibly NTL - may have related its final bid to other bids, perhaps indicating that it would pay whatever the next highest bidder was offering, plus a certain percentage. This will have to be dealt with by NM Rotschild, in a situation where the sellers were obviously hoping - and had asked for - clear cash bids.
NTL, the US group, has significant interests in Britain and Northern Ireland, where its NTL Ireland subsidiary is investing £600 million sterling (€910 million) in a complete fibre optic network in the North. It has also recently completed a £30 million high-speed, Britain-Ireland fibre-optic link - in effect a powerful high-speed ring for the transmission of data to any point in the Republic and the UK.
US software giant Microsoft has recently invested $500 million (€470 million) in NTL, ultimately in a collaboration designed to deliver broadband cable services to homes in the UK and Ireland, one of the reasons why it is seeking to acquire Cablelink.
Esat Telecom is bidding for Telecom in partnership with one of the largest cable companies in the US, Charter Communications, which is owned by the co-founder of Microsoft, Mr Paul Allen. Mr Allen bought Charter last January and is now of the top 10 US firms in the sector. It has invested heavily in upgrading the Internet access on its US holdings and would plan to do the same for Cablelink.
Esat Telecom is the leading independent telecom company run by Mr Denis O'Brien. As well as its main telecommunications business, it also owns 49.5 per cent of mobile operator Esat Digifone. If the Esat-led bid succeeds, it would provide Mr O'Brien's company with a strong platform by linking his existing infrastructure with that owned by Cablelink, offering a major boost to its drive to compete with Telecom in providing telephone and other cable-based services to the public.
