In advance of its flotation on the New York Stock Exchange, the consensus among US analysts is that Telecom Eireann needed a high-profile industry executive on board and that Mr Brian Thompson (58) fitted the bill.
"Getting Brian Thompson was a huge coup," said one Wall Street analyst who declined to be named. But he characterised Mr Thompson's departure as Telecom chairman - because of a possible conflict due to his new role at the helm of US telecoms company GTS - as a setback to Telecom Eireann's plans and not a good signal to the US investment community.
"There is no risk to the flotation taking place, but the stock market would definitely see his departure as a negative rather than a positive. It won't help but it also won't hinder Telecom's ability to get the IPO [initial public offering] done," he said.
Mr Thompson, he added, was a "perfect" choice as chairman of Telecom. He was that is needed on the investor roadshows during which the company will promote itself in advance of the IPO.
However, he predicted that US investors would still be "interested" in Telecom's stock. "They realise that Ireland is the fastest-growing economy in Europe and this would be a great way to buy a blue-chip telephone company that is the largest in its space."
The analyst said that because of the lack of telecoms experience of Mr Thompson's successor, Mr Ray MacSharry, the next best move Telecom could make was to appoint an industry player as a director on its board.
With that consideration in mind, the Government moved on Wednesday to appoint another American, Mr William Ferguson, to Telecom Eireann's board. He has held senior positions with Michigan Bell and New York Telephone and is a former chairman and chief executive of the NYNEX Corporation, a US telecoms group, which recently merged with Bell Atlantic and is now the biggest regional telecoms company in the US.
Another US telecoms analyst, Mr Robert Wilkes, of Brown Brothers Harriman in New York, said that, as NYNEX chief executive, Mr Ferguson had a lot of valuable experience in the US telecoms industry. But he pointed out that Mr Ferguson had retired from NYNEX some time ago and had been less active in the recent times than Mr Thompson.
He added: "Both have long records of prominent participation in the US telecommunications industry and would be well regarded by US investors if there's a flotation over here."
Mr Kevin Moore, telecom analyst at BT Alex Brown in Baltimore, Maryland, contended that a good chairman was usually required for flotation in the US. "Brian Thompson was a strong, well-known entity in the US and I don't know if he can be replaced. He's a loss for any company and certainly, in the near term, it may set back the phone company's flotation," Mr Moore said.
However, Mr James Friedland, telecom analyst at Arnhold & S Bleichroeder in New York, does not think Mr Thompson's resignation "is much of an issue" although he said Telecom would be "more marketable to US investors if it had an American chairman they were familiar with". But ultimately what would encourage US investors to buy Telecom stock, said Mr Friedland, "are the fundamentals and valuations of the company and the macro picture in Ireland".
Global TeleSystems Group, the McLean, Virginia-based company Mr Thompson has joined as chairman and chief executive, is going places and is also backed by the billionaire financier, Mr George Soros.
Mr Thompson is independently wealthy and the consensus is that he did not join GTS Eireann for the money. "GTS was a more exciting play for him," said one analyst.
The conflict of interest arose when the Government realised that GTS had an interest in Ireland through its acquisition of a company previously known as International Telecommunications Ltd.
Last year, ITL in Dun Laoghaire was bought by Netsource of Norway. Netsource Europe had been contemplating carrying out an initial public offering in the US, led by Lehman Brothers, but instead it was bought by GTS last October.
