Employees to sell 4% Eircom stake

machalla

Employees to sell 4% Eircom stake

Employees to sell 4% Eircom stake

December 09, 2004 08:22

Eircom's employee share ownership trust says it intends to sell more than 30.7 million shares in the company, representing just over 4%.

This would reduce the employees' stake to 24.7%.

Earlier this week, financier George Soros cut his stake in Eircom by selling more than 14 million shares in the company.
Saab

Soros was part of the consortium which took Eircom private in 2001 before it floated again in March.


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So are they all buying expensive prezzies for Christmas or is something else begining to dawn on Eircon investors?

viking

George Soros sold 14.6 million shares on Tueday morning generating almost €24m and the ESOT is selling twice that many shares which should raise €50m.

Anyone know the total amount of shares that the ESOT holds?

These share are not being sold for no reason, something is afoot in eircom. I hope this doesn't end in insider trading investigations...

/me strokes chin once again...

Mr_Man

It could have something to do with the end of the tax year. In the case of the ESOT they could be taking some money out of the piggy bank to ensure the Eircom employees have a very enjoyable Christmas, and at the same time take advantage of their CGT allowance for the year.

M

machalla

Yes I was thinking it may be CGT with regards to the ESOT. Obviously that doesn't impact Soros in the same way. Possibly just the end of tax year thing for him. Still its quite a few shares changing hands. Most of Soros holding apparently went to banks in the UK.

SkepticOne

The main point in holding shares is the guaranteed 7% dividend. However in order to pay this in addition to servicing the debt incurred during the leveraged buyout by Valentia Eircom need to come up with new sources of revenue. Otherwise, they need to take on more debt. They seem to be pinning a huge amount of hope on ComReg forcing the mobile firms into some sort of reseller deal with Eircom. Possibly this may have fallen through (a decision was supposed to be immanent) or else people are having doubts that it will happen.

viking

SkepticOne wrote:

They seem to be pinning a huge amount of hope on ComReg forcing the mobile firms into some sort of reseller deal with Eircom. Possibly this may have fallen through (a decision was supposed to be immanent) or else people are having doubts that it will happen.

Ahhh, I think you may have hit the nail on the head there Skeptic.

Pardon my suspicions, but I defo think there's more to this than simply CGT issues. George Soros would expect short-term benefits from his investments, if that situation changes he would get out.

What also makes me wonder is why the ESOT have announced that they are intending to sell prior to actually doing so?

Viking

SkepticOne

viking wrote:

What also makes me wonder is why the ESOT have announced that they are intending to sell prior to actually doing so?

Stock exchange rules maybe. If they control a large block of shares and appoint a director.

SkepticOne

Well, looks like Eircom got the decision in their favour on the mobile reselling thing.

viking

Yeah, bang goes my line of thinking....

damien

Their shares were recently recommended as a "buy" by some stockbroking firm. Maybe it was best to cash in now besides waiting 12 months when IrelandOffline could be dictating the broadband agenda in this country ?

jesus_thats_gre

A bit of maths in my head, 220 million shares or there abouts worth 360 million euro or so


*hope my head works