Detailed discussions between financial advisers to Vodafone and Eircom on the sale of Eircell to the British group are continuing, but it could be up to two weeks before a deal is sealed.
Originally it was thought a deal might have been completed this week, but informed sources have indicated the complex legal, tax and regulatory aspects of the deal have stretched out the due diligence process.
An Eircom spokesman would make no comment, but it is understood the financial aspect of the deal - one Vodafone share for every two shares in a demerged Eircell - has not changed.
Vodafone shares recovered from recent weakness yesterday and closed up 15p on 258p sterling. This puts a value of €2.15 (£1.69) on the demerged Eircell shares although this value will change daily with the Vodafone share price and the euro/sterling share price.
If the deal is approved, the Eircell shareholders - who will receive shares pro rata to their Eircom shareholding - will receive sterling-denominated Vodafone shares for their Eircell shares.
Meanwhile, analysts at Merrill Lynch, which ironically is advising Eircom on the Eircell disposal, have put a target of 400p sterling on Vodafone shares compared to the current 258p. If anything like that target is achieved, Eircell shareholders will do very well out of a share swap, assuming they hold the Vodafone shares they receive.
An Eircom spokesman would also make no comment on prog ress on the €2.2 billion bid from Mr Denis O'Brien's e-Island group for Eircom's fixed line business. It is understood that contact between Eircom and eIsland is through the respective financial advisers, Merrill Lynch for Eircom and DLJ for e-Island. "DLJ is looking for evidence as to why the e-Island bid is seen as too low," said one source.
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