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Swisscom's Eircom deal lies in tatters

Govt says 'no' to take-over

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Swisscom's plans to acquire Irish incumbent Eircom have been ripped to shreds after the Swiss government said it would not allow the telco to make overseas investments for at least the next 12 months.

If the Government sticks by its decision it means that Swisscom's plans to acquire Irish incumbent Eircom now lie in tatters. And any ambitions Swisscom might have had to snap up Danish telco TDC are also heading for the shredder.

A spokesman for Swiss government told Reuters: "We have told Swisscom that the government does not want them to get involved there (with Eircom). The (government's) board representative has been instructed to vote against such an engagement."

The Swiss Government owns 66.1 per cent of the country's leading telco and reckons Swisscom's acquisitive plans are too risky.

In a statement issued this afternoon Switzerland's leading telco said: "Swisscom Ltd acknowledges that the Federal Council has instructed its representative on the Board of Directors to vote against a possible acquisition that Swisscom might make abroad and, instead, to support the distribution of free capital to shareholders.

"The Board of Directors of Swisscom Ltd will review the proposals made by the government representative along with all other corporate, financial and legal issues related to the matter in the course of its regular decision-making process.

"The government representative's instruction does not relieve the Board of Directors nor the executive board from their legal obligation to responsibly perform their duties in the best interests of the company and all shareholders."

In a short statement Eircom said: "Eircom has noted the announcement from Swisscom today. Eircom has no further information and is not in a position to make any further statement at this time." ®

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