Australian bank makes Eircom takeover approach

Eircom has received an initial approach from Australian bank Babcock & Brown Capital that may lead to a formal takeover bid, the telecoms firm said today.

An Eircom statement to the Irish Stock Exchange said a further statement may be made in due course; it did not say when the approach was made.

The Australian investment group currently owns 12.5 per cent of Eircom.

Babcock & Brown advisers are believed to have met with advisers to the Eircom employee share ownership plan (Esop). The support of the Esop would be critical to the success of any takeover move.

Babcock & Brown is understood to want to split Eircom into two parts, with one arm concentrating on the firm's network operations.

This afternoon, shares in Eircom were up eight cents to €2.24 at 3.30pm on the Dublin market.