B&B Capital takes line in Irish phone company

SYDNEY - Investment fund Babcock & Brown Capital has acquired a 12.5 per cent stake in Irish phone company Eircom Group, which has been the subject of takeover speculation.

The investment was worth A$405 million ($445 million).

"As a first investment for Babcock & Brown Capital, we see this as a strategic shareholding in a company with robust fundamentals and a positive outlook which is not fully recognised by the market at the present time," B&B Capital said.

B&B Capital has a 10.8 per cent stake while its manager, Babcock & Brown, has a 1.7 per cent interest.

Eircom said last week that it was not in talks with Swisscom, after Irish media reported that the Swiss carrier had made overtures about a 3 billion ($5.3 billion) bid.

B&B Capital executive director Rex Comb said the investment fund was optimistic about the Irish economy and Eircom had made the right strategic move in acquiring mobile phone firm Meteor.

Eircom's superior market position in Ireland was different to that of Telstra, Australia's largest phone company, Comb said

"In contrast to Telstra in Australia, Eircom has an increasingly superior market position and an outlook for top-line growth with its re-entry into mobile," said Comb.

"Eircom's market position is more like that of Telecom New Zealand."

- REUTERS