'Fair' pounds 1.6bn takeover of eircom.

Telecommunications giant eircom has agreed to a pounds 1.6bn takeover deal from Australian firm Babcock and Brown, the company confirmed.

Under the sale, shareholders will receive pounds 1.50 per share and will de-list from the London and Dublin Stock Exchanges.

Sir Anthony O'Reilly, chairman of eircom, said it was a fair and reasonable deal.

"After careful consideration, the independent directors of eircom intend unanimously to recommend shareholders to vote in favour of the resolutions to be proposed at the court meeting and the EGM," he said.

"The independent directors believe that the cash offer, which recognises the successful implementation of eircom's stated strategy, is fair and reasonable and is in the best interests of eircom ordinary shareholders, who will receive a substantial return on their investment since the eircom IPO in March 2004."

The Employee Share Ownership Trust will increase its holding in the company from just over 20% to 35%. Former British Telecom executive Pierre Danon will become chairman of eircom, while Con Scanlon remains deputy chairman.

The sale will pave the way for yet another change of ownership at eircom, the former state-owned company known as Telecom Eireann, which was first floated on the stock market in 1999.

The company then went private before returning to the stock market in 2004.