Vodafone shares recovered strongly after heavy early losses on the London market, as a feared sell-off on Wall Street failed to materialise. At the close in London, Vodafone was down 6 3/4p on 209 1/4p sterling. Earlier the share had fallen to 200p.
The formal offer document from Vodafone will be posted to Eircom shareholders today for the demerged Eircell 2000 with Vodafone offering 0.9478 of its own shares for every two shares in the demerged Eircell. Eircom shareholders will receive one Eircell 2000 share for every Eircom share they hold.
The sale of the subsidiary is subject to shareholder approval at an extraordinary general meeting next month.
At yesterdays's Vodafone price, Eircell 2000 shares are valued at €1.60. Together with the indicative offer of €1.10 from Mr Denis O'Brien's eIsland consortium, Eircom shares have a notional value of €2.70, compared with yesterday's closing price of €2.50 .
The overnight warning from technology giant Cisco that its earnings would fall far short of forecasts and speculation that Philips and Ericsson will embark on major rationalisation programmes saw heavy losses across the technology and telecom sectors, and markets across Europe were down around 2 per cent at lunchtime.
But consumer price figures from the US, indicating that inflation is under control, mean there is no inflation barrier to the Federal Reserve cutting rates at its May meeting.
The inflation figures gave the US markets an early boost and both the Dow and Nasdaq rose tentatively in early trading and were trading around parity as European markets closed.