The posting of the Rule 2.5 document - in effect an abridged version of the offer document for Eircom from Valentia Telecom - has finally started the formal offer process. But whether or not the e-Island group comes back with a higher offer for Eircom, it is likely to be next October or November before Eircom shareholders get their cashonly #1.27 a share or the #1.255 cash plus #0.04-#0.07 warrants from Valentia.
On that basis, ABN-Amro Stockbrokers in Dublin have reiterated their recommendation that Eircom shareholders should consider selling their shares in the market and get their cash now - albeit subject to broker's commissions - rather than wait until later in the year to get their money from Valentia.
The first key date in the offer process is July 25th, when the Employee Share Option Trust will have to have received acceptances from its members for the offer from Valentia. Acceptance by the ESOT members is one of the preconditions that Valentia has attached to its offer.
Given the recommendation from the ESOT trustee and advisers Schroders Salomon Smith Barney, acceptance is unlikely to be an issue.
Assuming there is no counter-bid to that from Valentia, then the timetable is as follows:
The first formal date in the takeover timetable is July 28th, by which time Valentia must dispatch the formal offer document - a bulky offering probably running to a couple of hundred pages - together with a form of acceptance of the consortium's offer. Normally this offer document is dispatched well within the 28-days from the announcement of the offer, but given the need to get ESOT members' approval, it will probably be the full 28 days in the Eircom situation. The posting of the offer document is Day 1 of the timetable.
The first closing date for acceptances is Day 21 from the dispatch of the offer document and in the case of the Valentia offer this is August 17th. The next important day is Day 42 - September 14th - by which time Valentia must have obtained sufficient acceptances to allow it make its offer unconditional. In Eircom's case, the offer is conditional on securing 80 per cent acceptances, which Valentia must cross before it can compulsorily buy any shares for which it has not already received acceptances.
Once the offer is declared unconditional, then shareholders who have accepted the Valentia offer are locked into the deal and cannot withdraw. Overall, the takeover timetable can last 81 days from Day 1 and this could conceivably extend the entire process until October 30th. It is only after this process that shareholders would get settlement cheques from Valentia.
That timetable presupposes that there is no counter-bid from e-Island or any third party. A counter-bidder can enter the fray any time up to August 17th.
