Regulatory problems await O'Reilly bid

The extensive media interests of the O'Reilly family may cause regulatory problems if the consortium chaired by Sir Anthony O'Reilly makes a successful bid for Eircom.

Sir Anthony and his family are the controlling shareholders of Independent News & Media, the largest media organisation in Ireland. Sir Anthony is executive chairman of the group and, together with his children, owns 27 per cent of its shares. Independent News & Media in turn owns 50 per cent of Chorus, the second-largest cable operator in Ireland. The group is also the dominant player in the daily and Sunday newspaper markets as well as owning 10 provincial papers.

The telecommunications regulator, Ms Etain Doyle, has already made clear her position that Eircom should not be a significant player in both the fixedline residential telecommunications business and the cable television market. In 1999, she forced Eircom to dispose of Cablelink, its cable subsidiary.

Sir Anthony's involvement in the Goldman Sachs-led bid will result in a degree of cross shareholding between Eircom and Chorus if it is successful. Any links that are established between Eircom and either Chorus or Independent News & Media are likely to be closely scrutinised by the regulatory authorities.

Sources close to the consortium point out that they are aware of his interest in Chorus and do not believe it will present a problem. The O'Reilly family's effective shareholding in Chorus is only around 15 per cent, they say. They also stress that Sir Anthony is involved in a private capacity.

Mr Pat Rabbitte, the Labour party spokesman on enterprise, trade and employment, said yesterday that any bid that involved Sir Anthony "will have to be very carefully considered by the Government and the Competition Authority.

"The policy issue involved here is whether or not it is in the public interest to allow a person who already has such a dominant position to acquire another huge slice of the communications sector," Mr Rabbitte said.

He called on the Government to make its position clear and for the urgent publication of proposed legislation on media cross-ownership.