A memorandum offering Cablelink for sale will be circulated to prospective buyers early next week. The sale is expected to generate huge interest among cable and telecommunications operators, attracting possibly in excess of 20 preliminary bids, according to industry sources.
It is understood that the sale will be a two-stage process. Interested parties will make submissions by the end of March. Following this, a shortlist of five or six companies will be drawn up, and the sale could be concluded by the end of May.
Cablelink, which is currently owned by Telecom Eireann and RTE, needs upgrading to offer multimedia services, such as video on demand and Internet services.
Various estimates say it will fetch between £150 million (€190.5 million) and £220 million. Although it needs at least £120 million invested in it to upgrade the system, Cablelink is attractive because it has the highest penetration for homes passed of any cable company in Europe.
It passes 410,000 homes and has 340,000 subscribers, both business and residential, predominantly in Dublin.
Likely bidders include Princes Holdings, NTL (currently cabling Northern Ireland, where it is known as Cabletel), Esat Telecom, United Pan-European Communications (UPC), Europe's biggest private cable operator and possibly Telewest, a cable group in Britain.
A host of other European and US-backed companies are also expected to express interest.
A number of companies have already been contacted by Cablelink's advisers, ABN-Amro Rothschild and asked to sign confidentiality agreements. This is to ensure they do not leak details of Cablelink's business.
The sale is being overseen by a steering committee, comprising representatives of Telecom Eireann (currently 75 per cent shareholders), RTE, the Departments of Finance and Public Enterprise and KPN/Telia (shareholders in Telecom Eireann).
Once the bids are assessed, the shortlist will be drawn up and due diligence will begin.
It is understood that although the shareholders will be anxious to get the highest price possibly, investment plans and future development of the network will be a second major criteria.
It is expected that all bidders will have combined cable and telephony expertise.
NTL is seen in the industry as being an extremely strong contender for Cablelink. The company's standing received a major boost earlier this week when Microsoft, the world's largest software group, invested $500 million (€440 million) in it.
NTL is Britain's third largest cable group and the investment is part of a strategy to accelerate the rollout of high speed voice, data and video services.
However, also this week, Microsoft took a $300 million stake in UPC which owns cable networks in 10 European countries.
UPC, which is expected to accelerate the deployment of its own services, is to list 32.5 per cent of its equity on the Amsterdam and Nasdaq exchanges. Forty million shares, will be sold in a two-week book building exercise ending February 10th next.
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