O'Brien may reach Eircom decision after Easter

Mr Denis O'Brien is expected to decide on whether to proceed with a firm bid for Eircom after the Easter break. A spokesman for the eIsland consortium led by Mr O'Brien said the group would first study the information contained in circulars being sent to shareholders next week.

The documents will contain details of the planned demerger of Eircell from Eircom and its sale to British group Vodafone. The transactions are subject to a shareholder meeting in Dublin on May 11th. Mr O'Brien and his advisers will be looking for any information in the document that will help them value the remaining part of the business. His consortium has already made an indicative offer of #1.10 per share for the fixed-line business of Eircom. International Investment & Underwriting, the other group which has expressed interest in the fixed-line business, is not expected to make a move until Mr O'Brien declares his hand.

Eircom sources said the documents would not contain any more information than was released by the company yesterday when Mr Alfie Kane, the chief executive, unveiled plans to restructure the rest of the group around the Irish fixed-line business.

The restructuring reflected the realities presented by the rapidly changing telecoms market and was not intended to make the rump of Eircom any more or less attractive to a prospective buyer, said Mr Peter Lynch, the Eircom finance director. Whether or not the strategy suited the interests of potential bidders was "irrelevant", he said. When asked if the company was planning to reject the approaches and mount a robust defence, Mr Lynch said "we have not contemplated anything out in that direction". He added that the current discussions had "a low emotional content" and were being conducted in a profession manner through the company's advisers.

The board of Eircom currently plans to unanimously recommend the sale of Eircell to Vodafone, according to Mr Kane. The performance of Vodafone's share price in the 10 days prior to the meeting will be monitored, however. Comsource, the Dutch-Swedish consortium which owns 35 per cent of Eircom, has already given an irrevocable undertaking to vote in favour of the demerger and accept the Vodafone offer.

Under the terms of the deal - which were agreed finally only last week - Eircom will not operate a mobile business in Ireland for up to three years although Eircom may become a reseller of Eircell's mobile services. Vodafone is paying 0.9478 of a Vodafone share for every two shares in the demerged Eircell, which is the equivalent of #1.57 for every share that investors currently hold in Eircom. When the deal was announced in January it was worth in the region of #1.80 per Eircom share.

Mr Kane defended the deal yesterday saying that small mobile operators such as Eircell faced long-term strategic challenges.