Shareholders should await the formal offer

What should I do now?

The best thing to do for the time being is nothing. You should by now have received a formal offer document from eIsland asking you to accept its offer of €1.36 per share. If Valentia goes ahead with the bid of €1.365 it announced yesterday morning, the eIsland offer is no longer the most attractive (in financial terms). You should now wait to see the offer document from Valentia before making up your mind.

What if I have already accepted the eIsland offer?

You cannot now accept the expected offer from Valentia without first withdrawing your acceptance of the eIsland offer. You can expect Valentia to contact you and explain how to go about doing this. Generally speaking eIsland has to let you withdraw if they do not obtain enough acceptances to allow them take control of the company within 42 days. If the eIsland offer lapses or is withdrawn, you are automatically free to accept the Valentia offer. The bottom line is that you will be able to sell to Valentia.

When will I get my money?

Under the terms of the agreement between Comsource and Valentia the takeover process has to conclude by November 27th, with payment made shortly after that.

What if I don't want to sell?

You do not have to accept any offer to buy your shares but the reality is that you will be forced to sell in the end. This is because, under company law, once someone has acquired control over 80 per cent of a company's shares it can force the holders of the last 20 per cent to sell.

What happens is I just don't respond, deliberately or accidentally?

As long as Valentia reaches the 80 per cent threshold it can compulsorily acquire your shares regardless of what you do.

If Valentia wins how much will I have lost on Eircom if I bought my shares at the floatation price of €3.90?

As of today you will have effectively paid €3.90 in June 1999 for the right to receive €1.36 in cash and half a Vodafone share two years later (Eircom sold its mobile business to Vodafone earlier this year in an all share deal). Vodafone shares are trading at around 155p sterling putting a value of around €1.25 on a half share. On this basis shareholders who bought at the flotation have loss around €1.30 per share or almost a third of their investment. There was a bonus share issue one year after flotation of one share for every 25 held.