Australian investment group Babcock and Brown Capital (B&B) has become the biggest shareholder in Eircom.
A stock exchange announcement from Eircom today showed B&B now has more than 23 per cent of the telecoms company.
With 253.4 million shares, B&B has overtaken the Employee Share Ownership Trust, which holds around 22 per cent, as the biggest shareholder in Eircom.
If B&B increased its stake to 29.9 per cent, that would trigger a mandatory offer for the company.
Eircom said last month it had received an approach from B&B that may or may not lead to an offer being made for the company.
The approach by the Australian fund was the second to the former state monopoly in four months and came days after Eircom reported weaker-than-expected earnings figures.
In November, Swiss phone group Swisscom said it was in talks to buy Eircom, but those plans were blocked by the Swiss government.
Swisscom had reportedly been prepared to pay between €2.40 and €2.50 per share for the company, but analysts have said it is unclear whether B&B would be ready to pay that.
Eircom's stock, which hit a life high of €2.45 in November, closed at at €2.21 on Wednesday. Based on that price, Eircom has a market value of €2.4 billion.