Telenor is unmoved at talk of Esat suitors

Norway's Telenor has said its hostile $1.9 billion (€1.88 billion) bid for Esat Telecom remains unchanged despite confirmation from the Irish telecoms group that it is discussing alternative offers with third parties.

"As long as we don't see any (counter) offer, we call this rumours and speculation in the market," Mr Morten Karlsen Soerby, Telenor International managing director, said yesterday.

He was responding to a statement from Esat in which it said it would explore alternatives with possible "white knight" bidders.

Esat did not identify the third parties involved or say how much they might offer or on what terms, but speculation has centred on Swedish telecoms group Telia, whose planned $47 billion merger with Telenor collapsed earlier this month. British Telecom has also been named as a possible counter-bidder but both companies declined to comment on the speculation.

"There are always rumours about different telecoms operators talking to each other and we have no comment on these rumours," Telia spokesman Mr Lars Bilstrom said. He said Telia was going ahead with the announced sale of its 14 per cent stake in Eircom, which would leave Telia without a market position in the Republic.

Meanwhile, Telenor continued to insist that its revised offer for Esat was a very good price and indicated it would seek to withstand pressure to raise it anew.

"There were also rumours of a white knight before Christmas, so this doesn't change anything," Mr Soerby said.

Telenor has already revised its bid once, lifting it to $85 per Esat American Depository Receipt - $42.50 for each Esat share - last Wednesday, up from initial figures of $72 and $36 respectively. However, Esat shares continued to trade around $93 on the Nasdaq yesterday, a level well above the revised offer price, indicating that the market expects a higher offer to emerge from some direction.

Any potential white knight would have to take into consideration Telenor's 49.5 per cent stake in mobile phone operator Esat Digifone, which it jointly owns with Esat.

Esat has already advised shareholders to take no action on the bid, pointing out that the first deadline for acceptance of the revised offer is not until January 14th.