eircom successful in bid for Meteor Issued 25 July 2005 eircom today announced that the company's bid for Meteor has been successful. The company has agreed to acquire Meteor from Western Wireless International at a cost of Â420m. The acquisition will be fully funded by a rights issue. Meteor is Ireland's third largest operator and is Ireland's fastest growing mobile business. Over the last eighteen months, its subscriber base has doubled from 181,000 to 410,000. With the acquisition of Meteor, eircom will have delivered on its stated strategy to re-enter the attractive Irish mobile market. The acquisition will accelerate eircom's growth strategy and increase the size of the telecoms market available to eircom from Â2 billion to approximately Â4 billion. eircom is setting a target to double Meteor's current market share of 10% within three to four years by continuing to be the low cost operator, offering Irish consumers simpler, better pricing combined with quality service. eircom will also expand Meteor's reach into the post-paid market. The acquisition will be funded by a fully underwritten rights issue at a minimum subscriber price of Â1.10 per share. The acquisition of Meteor and the rights issue are conditional upon the approval of eircom's shareholders with completion expected towards the end of 2005. Dividends per share are expected to be adjusted for the bonus element of the Rights Issue, such that the dividend yield will remain approximately constant. The Employee Share Ownership Trust (ESOT) which holds 20.9% of eircom's shares, has undertaken to vote in favour of the Acquisition and the Rights Issue and has stated that it intends to take up its rights in full. Commenting on the proposed acquisition, Sir Anthony O'Reilly, Chairman of eircom said: "Winning the bid for Meteor delivers on our promise to lead eircom back into Mobile. The acquisition will transform the growth prospects for eircom, which is good news for our shareholders and for our employees. Customers will benefit from our determination to ensure that Irish mobile users get a fair deal. Dr Philip Nolan Chief Executive of eircom said: "The acquisition of Meteor gives eircom a winning combination of broadband and mobile. This has been our goal since returning to the market last year. We look forward now to providing our unrivalled base of 1.4m customers with our newly acquired mobile capability, as the only company which can offer Irish consumers the full range of services - voice and data, over landline and mobile."
Tuesday, July 26, 2005
Eircom have bought Meteor. So hopefully this will be the start of a price war that will bring down prices of mobile phone costs. The fact that eircom can bring its size to bear on the market might mean that it can put a dent in to the monopoly of vodaphone and O2 . But the fact still remains that O2 and vodaphone have great financial muscle then Eircom so it will remain to see if eircom can do any better with meteor then Meteor did it's self. Eircom press release