ESAT is in discussions with other telecommunications companies in its search for a "white knight" to fend off Telia and Telenor's hostile takeover bid. The company confirmed last night its board had instructed management to consider "all possible alternatives" to the bid. This is likely to include talking to British Telecom (BT) and other players with the resources to outbid the Nordic offer.
Newtel - the temporary name for the newly-merged Telia and Telenor - has offered €1.58 billion (£1.24 billion), or $72 a share, for the Esat group. Telenor already owns 49.5 per cent of Esat Digifone, the Republic's second-largest mobile phone operator.
A spokeswoman for Esat said last night that the company was restricted by Stock Exchange rules in the information it could divulge. But she confirmed that the company had filed a document, known as a 14-D9, with the United States' Securities and Exchange Commission (SEC) last week.
The SEC filing records that the board of the company met, considered the offer, rejected it, and instructed management "to look at all possible alternatives to the Newtel tender offer".
The spokeswoman said that there was considerable interest in Esat from others in the sector. "There have been quite a number of approaches," she added.
With Esat and Eircom now firmly in play, industry analysts are keeping a keen eye on BT. The company has so far refused to comment on speculation that it is about to make another move in the Irish market. BT already owns half of Ocean, its joint venture with the ESB.
The company certainly has the resources to act as a "white knight" for Esat, topping Newtel's $72 a share bid. Such an acquisition would rule out a further purchase of Eircom.
Investors will also be tracking Esat's share price this week. The company has until Friday to make a formal response to the takeover bid. Esat shares closed above $80 on Friday, indicating that analysts still believe that the company's chairman, Mr Denis O'Brien, can find a white knight. But if an attractive alternative does not emerge, the stock could roll back down to the $72 on offer.
Meanwhile, the row between Telia and Telenor appeared to deepen over the weekend, with the Norwegian chief executive of the merged group rejecting the suggestion from the Swedish chairman that he should resign. "I'm prepared to keep going," Mr Tormod Hermansen told Aftenposten newspaper.
The two countries are in open verbal war over the merger, especially a board vote last Wednesday to site the prized mobile telephone division, worth an estimated 250 billion Swedish crowns, near Stockholm rather than near Oslo.
Mr Hermansen said that it was now up to the Swedish and Norwegian governments to sort out the tangle. He said he would travel to Stockholm today for talks on the merger of Telia with Telenor.
Mr Hermansen's critics got fresh ammunition last week when he Hermansen apologised for kicking a Norwegian radio reporter in an Oslo street. The Norwegian executive said he believed the reporter was a drug addict and that his microphone was a knife. He later apologised.
