Five suitors offer up to £360m for Cablelink

Companies are willing to pay up to £360 million (€457 million) for the State-owned firm Cablelink, Telecom Eireann said yesterday. The non-binding bids confirm that the market places a high value on the 350,000-subscriber cable service provider.

In a statement, Telecom Eireann, which owns 75 per cent of Cablelink, and RTE, which owns the remaining 25 per cent, said they had had received "five strong indicative bids in relation to the proposed sale of Cablelink".

"The bidders, in alphabetical order, are: Cable Management Ireland; Esat Telecom Group; NTL; TCI Tele-Communications Ireland; and UPC Services," Telecom Eireann said.

The statement added: "The amounts of the indicative bids, in descending order and not necessarily in the same order as that given above, are: £310£360 million; £300£350 million; £300 million; £275 million; and £250 million."

The two State companies said they and the Government-appointed advisers NM Rothschild & Sons had considered the proposals favourably, and were inviting all five contenders to submit binding bids for the next phase of the process. This should take place by the end of April, with a final decision and sale by mid-May.

In the meantime, a Telecom Eireann spokesman said, the five companies would be invited to carry out due diligence and would be given detailed briefings by Cablelink management.

Telecom and RTE said they were "extremely pleased" with the response, which showed that Cablelink was "an important and highly-desirable asset" with the potential to become a leading provider of advanced multimedia and telecommunications services.

The revelation that there were only five contenders surprised many in the industry who had predicted around a dozen serious bidders for the company.

Those companies listed by Telecom Eireann and RTE had been expected to bid, and to be in the final shakeout.

The TCI bid, in which the Independent newspaper group holds a 25 per cent share, has already outlined how it would unite Cablelink's 350,000 customers with Princes Holdings' 150,000 to develop a network across the State. TCI, the largest cable company in the United States, said that, within two years, it would offer all customers telephone, Internet and interactive cable television service.

The Dutch cable firm UPC said it would try to buy Princes Holdings if it succeeded in buying Cablelink, and develop a similar network. NTL, whose subsidiary Cabletel has begun rolling out its network in the North, is also thought to be a strong contender.

The two Irish bidders, CMI and Esat, are both expected to seek partners - probably in the United States - for the next phase. Industry observers say the £300 million-plus price tag, and a further investment of around £200 million in infrastructure, would put a strain on the finances of all but the largest firms.