Given the flotation price it recommended to the Government for Eircom, investment bankers at Merrill Lynch seem to like playing hardball with the market.

Remember, it was Merrill that told the Government to float Eircom at nearly €4.30 (£3.38) a share. Advice that, thankfully, was rejected by Bertie Ahern, Charlie McCreevy and Mary O'Rourke.

At the end of the pricing process, the Government simply split the Eircom valuations from Merrill Lynch (high) and AIB Corporate Finance (low) to come up with the €3.90 flotation price.

Now Merrill Lynch is advising Eircom on the sale of Eircell and it can be safely assumed that it will adopt its customary aggressive approach.

That approach didn't help Eircom shareholders when it came to putting a flotation price on Eircom 17 months ago, but investors will no doubt be hoping that the bankers will be able to get the best possible deal for them when it comes to selling Eircell.

Obviously, Merrill's investment bankers don't talk to their equity analysts. And why should they - Chinese walls and all that? Still, it was a bit surprising that Merrill's telecoms analysts were able to write a 10page report on Vodafone without once mentioning that the British giant was negotiating the €5 billion-plus takeover of Eircell. OK, Vodafone is 50 times bigger than Eircell - but not one, single mention?

Mind you, the Merrill report on Vodafone will be good news if the 12-month target of 400p sterling (€666) is reached. That's a 55 per cent increase on Vodafone's price in the market and would mean hefty gains for Eircom shareholders, who are expected to receive Vodafone shares at around the level of 250p-260p sterling. That assumes, however, that the analysts are right in their assumptions about Vodafone.

In the short term, Eircom shareholders are expected to be insulated against a sudden fall in the Vodafone share price in the period between the deal being agreed and the new Vodafone shares being issued to Eircom shareholders.

This "cap and collar" arrangement is commonplace in these situations where people are receiving shares in a company that may fluctuate in value. In the Vodafone situation, Eircom shareholders will be protected against falls of up to 10 per cent in the Vodafone share price.

Once the 1.1 billion Vodafone shares are issued to Eircom shareholders, they are at the mercy of not just the stock market but also currency markets. It mightn't be very europatriotic, but Eircom shareholders getting sterling-denominated Vodafone shares will do best from a weak euro.