A majority of the 14,400 members of the Eircom employee share ownership trust (Esot) have voted to accept the takeover of the company by the Australian group Babcock & Brown.
The outcome of the ballot, notified yesterday afternoon to the stock exchange, brings the deal a big step forward. Failure to endorse the takeover would have prevented the transaction from taking place. Esot members are heavily incentivised to go ahead with the deal, which will increase its stake to 35 per cent from around 22 per cent at present.
Babcock & Brown will own 60 per cent of the company and another, as yet unnamed, party will own 5 per cent.
Esot members also stand to receive some €300 million by June 2009 in a tax-free dispersal of preference shares in the bid vehicle, BCM Ireland Equity.
The Esot recommended the takeover to its members, stating in ballot documentation that there would be a distribution of €80 million to Esot members next November. This will be followed by another €80 million distribution in June 2007 and two distributions of €70 million in June 2008 and June 2009.
"The distributions of preference shares in accordance with the redemption schedule... would mean that participants with full notional allocations would each receive approximately €30,000 by June 2009."
The deal is scheduled to close on August 18th. Shareholders will be asked at a court meeting and an extraordinary general meeting on July 26th to sanction the deal and Eircom's delisting from the stock exchange. This is seen as a formality, given that the Australians and the Esot already hold more than 50 per cent of Eircom between them.
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