Eircom shareholders will receive cheques from Valentia Telecommunications early month if Valentia's recommended offer for the company is declared unconditional by the first closing date of September 21st..

If Valentia manages to get 80 per cent acceptances for its €1.365 per share by that date, the offer will be immediately declared unconditional and cheques for $1.335 per share will be sent to Eircom shareholders within two weeks. The balance of the Valentia offer -a dividend payment of three cents per share - will be sent to Eircom shareholders when the offer is declared unconditional at a later date.

But only those shareholders who actually complete and return the acceptance form in the offer document will receive their cheques within two weeks of the offer being declared unconditional. Eircom shareholders who hold paper share certificates will also have to return these certificates with their acceptance, although this will not apply to shareholders who hold their shares through the Eircom nominee account.

But shareholders who either decide not to accept the Valentia offer or who omit to return the acceptance form will not receive their cheques, and money due to these shareholders will be held in an escrow account until valid acceptance forms are received or until their shares are compulsorily acquired in the final stages of the offer.

A source close to Valentia said: "If people want to get their cheques at the earliest time then they must return the acceptance forms. Otherwise their money will be held in the escrow account until their acceptances are received."

The offer document shows that Lionheart Ventures - the investment company of chairman Sir Anthony O'Reilly - will invest €25 million in equity in Valentia and this will give Sir Anthony a 3.7 per cent stake in the company.

The biggest equity injection comes from Providence Equity Partners which is providing €313.6 million for its 46.4 per cent while Soros Fund Management is providing €125 million in equity for its 18.5 per cent of the venture. The remaining equity comes through €10 million from Goldman Sachs and €202 million from the Eircom ESOT, which will have a 29.9 per cent equity but 25 per cent voting interest in Valentia. The total equity funding for the takeover is €675.6 million

Apart from its €202 million in equity, the ESOT is also investing €247 million for 247 million preference shares although the ESOT will sell 20 million of these shares immediately after their issue to help the trust pay down debt. The €227 million of preference shares can be redeemed by the ESOT, 12 years after the Valentia offer is declared unconditional. Another €5 million worth of preference shares is being issued to some of the advisers - thought to be Goldman Sachs - but the offer document does not disclose the total fees that are being paid to the various financial, legal and other advisers to the consortium. Banking sources believe it is likely that fees for advisers will be well in excess of €50 million.

Valentia's total debt finance is €2.4 billion, with €480 million each being provided by Goldman Sachs, Deutsche Bank, Barlcays Capital, Bank of Ireland and Allied Irish Banks. The terms of the debt financing are not disclosed but ratings agency Moody's has assigned a Baa3 rating to the senior unsecured debt.

The offer document lists various concert parties associated with Valentia. These include Independent Newspapers Management Services which bought four million shares in October and November, around the time that Sir Anthony O'Reilly's possible interest in Eircom was first reported.