Commissions paid to the investment banks who handled Telecom Eireann's flotation on the Dublin, London and New York stock markets are likely to little short of £60 million (€76 million), as a result of the higher-than-expected flotation price and the split of the shares between institutional and private investors.
Under the "Irish retail agency agreement" with the two global co-ordinators, AIB Capital Markets and Merrill Lynch receive a commission of between 1.4 per cent and 1.8 per cent of the value of the retail offering.
The value of the 594 million shares sold to the public was £1.82 billion and this suggests that the two investment banks shared commissions on this aspect of the flotation between £25.5 million and £29.1 million.
The middle of this commission range is £27.3 million and sources said that given that 55 per cent of the Government shares were sold in the retail offering, this is the likely level of commission for the two banks.
The value of the 486 million shares sold to institutions in the Republic, Britain, the US and Europe was £1.49 billion, and a 2 per cent commission was paid to the six international managers who arranged the sale to more than 600 institutions.
This means that AIB, Merrill Lynch, ABN-AMRO Rothschild, Dresdner Kleinwort Benson, Morgan Stanley Dean Witter and SG Paribas have shared commissions totalling £29.8 million in respect of the institutional offering.
