Eircom will return to the Irish stock market today with a market valuation of some €1.1 billion, making it the largest flotation in Dublin since the telecommunications firm last joined the market in 1999.
Eircom is expected to begin trading at €1.55 per share after the price was set at a meeting of the company's board late last night.
A price at this level would be at the lower end of an indicative range set by the company when it launched the initial public offering (IPO) at the start of this month.
The flotation will allow Valentia Holdings, the vehicle that led Eircom's exit from the Irish Stock Exchange in 2001, to increase its investment by more than €150 million in 2½ years.
This increase comes on top of a €400 million dividend that was shared by Valentia's five main investors last year. Collectively, the investors - including Sir Anthony O'Reilly - bought in at €676 million. Sir Anthony's initial investment of €25 million has risen to some €43 million over the past 2½ years. The gain comes on top of a €10 million dividend drawn by him from the company last year.
The return is likely to rankle with some of the 450,000 small shareholders who lost money on Eircom when it was taken private by Valentia.
The Eircom Employee Share Ownership Trust (ESOT) will see the €201 million it invested in 2001 increase to €250 million.
The support of ESOT was vital to Valentia's successful takeover of Eircom, which was contested by Mr Denis O'Brien's eIsland consortium.
ESOT is paying some €82 million for new shares under the flotation in an effort to make sure that its 30 per cent stake in the company is not overly diluted.
Eircom's share offering, which was inaccessible to most of the public this time, had been scheduled to close at 4.30 p.m. yesterday but this was brought forward to lunchtime in light of the strong demand.
Sources said the IPO could have been "got away" two times over as investors reacted positively to the prospect of taking a holding in the company.
The decision to sell the shares at the lower end of the price range reflects the company's desire to achieve the flotation with the minimum of difficulty as well as the renewed uncertainty that has hit global markets recently.
Market sources said the offering had been well-received by large financial houses both at home and abroad, with Irish fund managers such as Irish Life Investment Managers, Hibernian Investment Managers and Bank of Ireland Asset Management opting to buy shares.
Private individuals who wanted to participate in the IPO needed to pay a minimum of €40,000.
