Float or flog? Eir owners would be mad not to explore sale

It would be far handier, and less risky, to sell to a trade buyer than to launch an IPO

The Eir brand being launched in 2015: the telecoms group is being whispered about. Photograph: Eric Luke

The Eir brand being launched in 2015: the telecoms group is being whispered about. Photograph: Eric Luke

 

Dublin’s financial community can sometimes appear a bit like a bustling, ever-so-plush, city centre bar: full of people in business suits imparting snippets of industry gossip into each other’s ears while checking to see who’s looking.

The future of Eir is currently the topic du jour in Dublin’s whispering community. There has been mounting speculation in recent weeks that the telco may not make its long-awaited comeback to the stock market, but may instead be sold to another telco by the assorted US and Singaporean funds that own the business.

If a deal is in the offing, it is being discussed at a high level beyond that of local management, who insist they are focused on growing the fixed-line and mobile business and not on selling it.

Initial public offerings (IPOs) are inherently risky affairs, full of pesky moving parts, financial uncertainty and subject to the vagaries of the market. It a credible trade buyer were to emerge for Eir ahead of an IPO, who could blame the funds that own the business for exploring this option first?

It would be far handier, and less risky, to sell to a trade buyer. It would also likely be the preferred option of trade unions, who would welcome a tie-up with a trade player over the prospect of coming under the thumb of another financial investor at some stage in the future.

In the context of the recent re-emergence of a trade sale of Eir as a real possibility, what are we to make now of the recent appointment of British executive Carl Leaver as chairman?

His last executive role, as chief executive of gambling company Gala Coral, saw him shepherd that business into the arms of Ladbrokes, with which it merged last November.

Has Leaver been brought on board by Eir’s shareholders to float the business? Or to flog it?

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