A successful takeover by Irish entrepreneur Sean Melly of telecom operator Eircom would be difficult to pull off, Eircom Holdings - formerly Babcock & Brown Capital - has said.
"Whatever [he] has in mind it might be difficult, because there are change-of-control provisions in the debt agreement [of Eircom Holdings]," Eircom Holdings chief financial officer Haydn Vella told Investor Weekly.
"That is why most of the focus is on Eircom Holdings, rather than at the Eircom level itself."
Eircom Holdings is the largest shareholder in the Irish teleco, having a 57 per cent interest in the company. It also fully owns the Israeli Golden Pages.
Melly was preparing a bid for Eircom and was being supported by JPMorgan, which was advising him on the structure of the offer, Irish media reported.
The investment bank is also said to be willing to provide debt for the acquisition.
Melly previously founded and sold two telecoms businesses, TCL Telecom in Ireland and eTel in Eastern Europe. He now runs an investment firm named Powerscourt Investments, but will assume the role of chief executive of Eircom if the takeover succeeds.
Eircom Holdings on the other hand has already received a bid from TaemasBridge, an investment vehicle led by former Babcock & Brown executives, valuing the company at $175 million.
Vella has strong doubts this bid would be successful either. "Eircom itself has come out and said it did not support the TaemasBridge bid," he said.
"I wouldn't see how TaemasBridge would do that without the Eircom support."
The Melly bid is reported to be higher than the TaemasBridge offer. If the Irish investor succeeds in acquiring the company, then it would mean the end of Eircom Holdings.
"If [he] were to take control of Eircom, and as we are disposing of Golden Pages, that would mean the end of the company, because we would have nothing left," Vella said.
