Melly shortlisted to acquire Eircom masts

Irish telecoms entrepreneur Sean Melly is among the shortlisted bidders to acquire Eircom's phone masts business.

It is understood that Mr Melly, the founder of Etel, has made a bid of more than €150 million though Powerscourt Investments, his private equity vehicle.

Mr Melly is being advised by NCB Corporate Finance and has secured funding from an Irish bank.

He is believed to have earned about €10 million from the sale of Etel to Telekom Austria in 2006 for €104 million. That investment was also held for him by Powerscourt.

He recently made a large undisclosed investment in Dublin-based medical devices company Vasorum and has a number of investments in private com-panies, primarily in the telecoms and technology sectors.

Mr Melly founded Etel in 1999 and built it to a stage where it had operations in Austria, the Czech Republic, Hungary, Poland and Slovakia.

Babcock & Brown is effectively seeking a sale and leaseback arrangement for its 300 phone masts around the Republic. Eircom and Meteor are the biggest users of the masts.

Other customers include mobile operators Vodafone, O2 and 3, and wireless telecoms companies. Up to six bidders are thought to still be in the running for the business. These are believed to include Arqiva, a UK-based mobile communications group owned by a consortium led by Australian investment company Macquarie.

Presentations were made to the shortlisted bidders earlier this week by Babcock & Brown and managers of the masts business. Second-round bids are expected to be lodged in the week beginning August 27th.

No Eircom staff will transfer with the business.

The masts business is attractive to bidders due to the planning difficulties involved in erecting new telecoms masts around the country.

There is also the potential to attract additional business, including the new network being proposed by the Government for emergency services and digital terrestrial television operators.

Babcock & Brown said yesterday that it would record a loss of up to €100 million from Eircom as a result of having to pay for 900 redundancies.

The Australian investment group is considering splitting its networks and retail divisions and selling the retail arm.