Oz investor swallows €400m slice of Eircom
There's speculation that Eircom could become the focus of a take-over bid after Australian investment outfit Babcock & Brown acquired a 12.5 per cent stake in the Irish incumbent.
Babcock has shelled out around €400m for its slice of the dominant Irish telco which it believes it currently undervalued.
Said Babcock exec Rex Comb: "We are optimistic about the fundamentals of the Irish economy and the benefits that flow to Eircom's business as a result of this underlying strength.
"We see this as a strategic shareholding in a company with robust fundamentals and a positive outlook which is not fully recognised by the market at the present time."
Part of Babcock's optimism follows Eircom's summer acquisition of Ireland's third largest mobile operator Meteor for €420m.
"In contrast to Telstra in Australia, Eircom has an increasingly superior market position and an outlook for top line growth with its re-entry into mobile. Eircom's market position is more like that of Telecom New Zealand," said Comb.