Almost £1 billion in Telecom Eireann shares look likely to be made available to the general public in the forthcoming flotation of the company on the stock market. The Minister for Public Enterprise, Ms O'Rourke, is understood to believe that over half of the Government shares being sold should be made available to the public, with the rest going to major financial institutions in Ireland, the US and Britain.
The Government has still to formally decide how much of its holding to float on the market. However, it is expected to sell around 35 per cent of its 51 per cent holding. With market estimates being that the flotation will value Telecom Eireann at some £5.5 billion (€6.89 billion) the 35 per cent stake would be worth almost over £1.9 billion, with at least half of this - and possibly more - to be sold to the general public.
Plans for the flotation are well advanced and were discussed by the Minister with advisers Merrill Lynch on a trip to New York earlier this week. She also briefed 10 senior analysts who work for major US investing institutions who can be expected to buy some of the shares.
The first draft of the company prospectus is believed to be completed . It is understood that pre-registration for the public - an opportunity to express an interest in the share issue - will commence around the end of April and the price range at which the shares will be quoted will by announced around the 7th to the 8th of June. After that a road show will be get underway to sell the shares to major institutional investors on both sides of the Atlantic. The share offer will then close around the end of June, with trading of the shares on the stock market expected to commence in early July. Any major setback in the share markets could still upset this timetable, however.
The Government is also understood to be pressing Telecom Eireann's strategic partners, KPN and Telia, for a decision on what is to happen to Telia's shareholding in the company. Telia of Sweden is merging with Telenor of Norway, creating a conflict of interest as Telenor has a 49.5 per cent stake in the mobile phone operator, Esat Digifone while Telia has an interest in Eircell through its Telecom stake.
Sources believe that KPN is likely to agree to take up the Telia stake in Telecom. However, this issue and the attitude of the strategic alliance partners to the 15 per cent stake they have an option to purchase will have to be fully outlined in the prospectus.
