Both bids deceived for a stake in Telecom Eireann, will meet the requirements of the semi state company, the Minister for Communications, Mr Lowry has said.
Defending the fact that only two companies have bid for a 35 per cent stake in Telecom, he said that it was hoped to have a strategic alliance in place by the end of the year. Fail has severely criticised the minister for his handling of the process. Two of those who showed initial interest, British Telecom and US company Bell Atlantic dropped out of the race.
The bids from Tele Danmark the Danish national telephone company and the KPN/Telia consortium, comprising the Dutch and Swedish telephone companies, are understood to be well below original expectations of £400-£500 million. They may be as low as £250 million.
Mr Lowry said the figure of £500 million had been "plucked from the air".
Speaking on RTE radio yesterday, he said nobody would have been in a position up to now to say what a 35 per cent stake would be worth. He claimed this was a figure "which was written on the back of an envelope".
There was no basis for forming the view that the company was worth this kind of money, he said.
He said the company had been working hard on cutting its cost base and was now a very attractive proposition.
Meanwhile, Tele Danmark is expected to post 1995 pre tax profits of £603 million up from £436 million in 1994, when it issues what may be its last annual report as a state controlled company today.
The Danish government has set no date for relinquishing some or all of its 51 per cent stake but has said that it does not see itself retaining control after deregulation of Denmark's telecoms industry, scheduled to begin in July.
The company, with a market capitalisation of around £380 million, is among the biggest on the Copenhagen Stock Exchange and has set overseas expansion as its main goal.
It has bought into Belgium's Belgacom, has joint ventures in China, South Korea and eastern Europe and is part of a consortium recently granted a mobile phone licence in Poland.
Tele Danmark has been criticised both in Denmark and abroad for high prices, but Research Minister Mr Frank Jensen has challenged a recent EU report saying it used its current monopoly of fixed line services to impose Europe's highest connection and local call charges.
"I don't think that one can single out particular tariffs and extrapolate from them to establish whether a telephone company is competitive or not," he said.
