S’pore plans $4b Irish telecoms bid

County Sligo in the Republic of Ireland. There are challenges with bringing Ireland online. Source: Iha

GIC, previously the Government of Singapore Investment Corporation, plans to acquire a multimillion-dollar minority stake in the Irish telecoms operator Eir in a deal valued at around US$4 billion (€3.5 billion).

The city-state demonstrates its strength to invest in the rapidly developing communications and media-services sector.

GIC has investments in more than 40 nations and its portfolio ranges from real estate to stakes in the technology, infrastructure and service sectors. Its recent share deals include a US$500-million purchase of Chinese ecommerce firm Alibaba Group Holding from Japan’s telecoms operator SoftBank Group.

GIC said last year the sharp rise of asset prices, when the global economy was still struggling to gain a firm foothold, made the investment environment unpredictable.

Eir, formerly known as Eircom, said the Singaporean sovereign-wealth fund, one of the world’s largest, intended to acquire shares in the group from existing shareholders worth up to €230 million at a price of €232 per share.

Few other details were released at the early stage of the sale process. GIC last year announced that it wanted to invest in British-based mobile operators O2 and Three after their planned merger, but the European Commission blocked the merger.

US hedge fund Anchorage Capital would remain Eir’s largest shareholder with a stake in excess of 35 per cent, Eir said. Anchorage welcomed the Singaporean interest in becoming a “new long-term shareholder” and said it was looking forward to partnering with GIC on “value-creation opportunities”.

Eir, which provides Irish telecoms and media services to around 2 million customers, also said shareholders with smaller percentage holdings would get the opportunity to join in the sale to help liquidity.

GIC has around US$344 billion in assets, according to Sovereign Wealth Fund Institute research. The bulk of its investments are in North America, followed by Asia and then Europe.

And in April, GIC justified a raft of management changes as allowing the firm “to deal with an investment environment of lower returns, increased volatility and greater uncertainty”.

Last year it cut its exposure to Europe, with investments in the continent making up 25 per cent of its assets, compared with 29 per cent a year earlier.

Eir said it expected its fibre optical cables to reach 1.6 million premises by the end of this month and more than 80 per cent of Irish customers “as quickly as possible”.

Its shareholders will vote on the proposed GIC deal at the end of June.