When the final curtain fell on the Esat takeover battle this week, one company source indulged in a little schadenfreude, at Telenor's expense: "Basically, they just wanted an asset abroad and they thought they could roll the Paddies." The course of the relationship between Esat and Telenor had never run smoothly, but by last November, things were bad. However, Digifone, shared equally by both, was too juicy a mobile morsel to walk away from.

Both sides wanted to get rid of the other and Esat turned up the heat. One source admitted: "By then, we were actually trying to get rid of them."

Esat took a legal case against the Norwegian firm, claiming it was passing confidential information to Telia. This was not as farfetched as it sounds; Telenor and Telia were merging, with the Swedish firm as the senior partner, and decisions had to be made about whether to remain in Digifone or Eircom. Telia had a stake in the latter.

Telenor responded with an offer to Esat for its share in Digifone. The offer, at almost $800 million (€779 million), would have been seen as generous at the time, if it had been made public. Esat rejected it out of hand, and countered with its own bid for the Norwegians' 49 per cent of Digifone. It was not the first offer Esat had made.

Several weeks beforehand, Esat had begun preparing for a hostile takeover approach, setting up a defence team with two of its bankers, Credit Suisse First Boston and Chase Manhattan.

"To be honest, we really didn't expect it to come from Telenor," a source said.

At the end of November, Eircom announced that Telia and KPN were pulling out of the former State-owned company, and Telenor and Telia together made their first offer, at $72 a share, for Esat.

Esat's financial team, led by chairman and chief executive Mr Denis O'Brien, were in New York constructing their defence lines. They came straight home and went to work.

They needed soldiers on many fronts: public relations; legal; tactics; banking. Credit Suisse and Chase stayed on the "defensive" side of things, Donaldson, Lufkin & Jenrette went looking for a "white knight". There were 50 people involved and the latest information was kept within each organisational cell.

Said Mr O'Brien: "This is high stakes poker. When you are in a situation where you have a hostile bid against you, you have to win a few things."

In all, there were six companies seriously interested in buying Esat - or at least interested enough to come to Dublin and look at the books. British Telecom (BT) was there from the start.

Under the rules of the Irish Stock Exchange's takeover panel, Esat could not show the visitors anything more than what was in the published accounts - or if it did, it had to send a copy to Telenor's bankers.

Under these circumstances, modern due diligence tends to be more about meeting local management and asking the right questions verbally than trawling third-quarter figures.

Among those that considered buying Esat were Vodafone and Energis. In what may be a worrying sign for Eircom, there was no interest from the United States' telecommunications giants, apart from NTL. From the start, BT was the favourite.

"BT was really into it from the beginning. They had the bankers involved, the lot," one source said.

Mr O'Brien said: "We liked each other from the first meeting. Straight away we struck up a good relationship."

Under the rules, these were "discussions", not "negotiations".

"It is a dance," explained one source. "You talk about everything but price."

The rumours about BT did not worry Telenor much at all. Firstly, the Norwegian firm had a good relationship with the British company, with joint venture projects in Sweden and Germany. The head of Telenor had even got into trouble during the merger negotiations with Telia, because he met the head of BT to discuss the possibility of the British firm taking a strategic minority stake when the new Nordic company was formed.

Secondly, Telenor believed that BT's 50 per cent stake in Ocean would cause it so many regulatory problems with the Irish and EU authorities that it would be deterred from taking out Esat.

In Dublin, the pace was hotting up.

"It was a team effort, and it was hour-by-hour stuff," said Mr O'Brien. "We had phone calls on Christmas day - on every day in fact."

Everything was kept secret, and BT was acutely aware that Mr O'Brien's face was well known: "We had to go in a secret entrance to BT's headquarters in London, and we would be taken up by the chief financial officer's secretary."

When the two finally came to discussing price, Telenor, the hostile bidder, inadvertently provided Esat with a boost. The Norwegian company was originally convinced there would be no "white knight", but now moved to up its offer in what it hoped was a pre-emptive knock-out blow to any rival. The price was now $85 a share, not $72.

But Esat was pitching itself high anyway. With excellent third-quarter results, and the purchase of Ireland On-Line/ Postgem under its belt, Esat had convinced key investors it was worth far more than the $40 mark at which its share had languished for more than a year.

"The IOL purchase signalled to the market that we were much more of an Internet and data company, not just a mobile operation," one source said. "On roadshows, the line that we were the `number 1 corporate Internet service provider' was crucial, especially in the US."

When BT ran its ruler over Esat, the British firm valued the fixed-line business at 55 per cent of the company.

At $100 a share, Esat's negotiators had achieved its most ambitious target price. Company insiders hint that had the cards not been played in the order they were, Esat would have been happy to accept less.

Mr O'Brien said the groundwork for the high valuation took place three years ago: "The big gamble was the board decision to invest in a network at the beginning of 1997. That gave us the backbone with which we could attack the market and compete with Eircom."

He also paid tribute to the directors of the company: "From the day we set up the company, we put in place a board as if it were a big company. That was a key thing."

However, Mr O'Brien accepted that, until very recently, $100 a share would have been an unthinkable price: "But we live in changing times, and certainly the market re-rated Esat following our third-quarter results in September."

By last Thursday, the deal was done.

"Ultimately, it came down to a handshake with [BT chief financial officer Mr] Robert Brace," said Mr O'Brien.

For Esat, each minute until the BT board meeting at 4.30 p.m. on Monday was a long one. In fact, just seven people in the Irish company knew: Mr O'Brien; his most trusted senior financial adviser, Mr Paul Connolly; director Mr Massimo Prelz; three advisors from Donaldson, Lufkin & Jenrette; and one lawyer.

Separately, to the delight of Esat, BT did a deal with International Investment Underwriting, Mr Dermot Desmond's investment vehicle, to purchase the remaining 1 per cent of Digifone, giving it majority control of the mobile subsidiary.