Hutchison Whampoa has now removed all conditions and resubmitted a €2 billion cash bid for bankrupt Irish telecoms group Eircom after having its initial bid €2 billion rejected earlier by the Ireland's court-appointed examiner, according to reports.
The Hong Kong-based company, which owns the 3 Group of mobile operators, saw its initial cash bid rejected by Grant Thornton, the accountancy firm which is handling the bankruptcy process of Eircom, according to Dow Jones Newswires. A source close to the situation told Dow Jones that Grant Thornton turned down the offer due to conditions sought by Hutchison as part of its bid. It is thought that these conditions related to the deal requiring regulatory clearance, possibly at European Union level.
Getting a deal done could take months, according to an Irish Times article, and would likely go beyond the 100-day limit set down by the Irish High Court for the examinership, or bankruptcy, process. The original Hutchison bid included the company backing a €1 billion-plus investment in Eircom's fibre network, which may now have been dropped as part of the revised offer, the report said.
Commenting on the proposed deal, Lam Ka Kei, who tracks Hutchison at Redford Asset Management in Hong Kong, told Bloomberg: "Eircom is undergoing restructuring, so the company may be purchased at a discounted price. For Hutchison, price is the all-important thing in any deal. There are many companies in Europe that face financial issues, so there are opportunities for Hutchison."
Hutchison and Eircom both declined to comment, according to Bloomberg.
3 Ireland has invested about €800 million on building its 3G network since entering the market. It is presently ranked behind mobile rivals Vodafone, O2 and Meteor, which is owned by Eircom. Eircom filed for the Irish equivalent of bankruptcy protection on March 30 with €3.8 billion of net debt, the biggest corporate insolvency in the nation's history.
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