French billionaire and majority owner of Paris-listed telecoms company Iliad, Xavier Niel, is in talks to buy a major stake in Eir, which may result in the mogul ultimately taking a majority interest in former phone monopoly, according to sources.

Eir was valued at €3.5 billion last year when Singaporean sovereign wealth fund GIC acquired a stake in the company.

The Irish Times reported on Thursday that Eir owners, led by New York hedge fund Anchorage Capital, which owns 42 per cent of the company, were weighing a trade sale of the group instead of a stock-market listing, which had been been seen as the most likely sale option, mooted for as early as 2018.

Investment

Mr Niel, who owns 52 per cent of Iliad, where he is deputy chairman and chief strategy officer, is pursuing an Eir investment through a company called NJJ Capital, according to sources.

While there had been speculation in Dublin that Iliad was in talks with Eir’s owners, an Iliad spokeswoman said on Wednesday it “is not in discussion about an acquisition”. She did not respond to calls and emails on Thursday, while a number of calls to Iliad seeking to get through to Mr Niel went unanswered.

It is not clear if the talks are centred on Mr Niel buying parts of the existing shareholders’ holdings or injecting fresh capital into Eir. New funds would allow it to cut its €2.3 billion debt and line up finances for a possible contract under the National Broadband Plan.

Eir said in a statement on Thursday its major shareholders “have been approached by a potential investor who may wish to make a significant investment” alongside them. It said that the main investors “affirmed their continuing commitment to their investment” for the “foreseeable future”.

‘Le Monde’ co-owner

Mr Neil, whose net worth is estimated by Forbes to be $9.9 billion (€8.3 billion), is co-owner of French daily newspaper Le Monde and has a controlling interest in Monaco Telecom.

If the businessman ends up with a majority stake, it would mark the seventh change in ownership of Eir in less than two decades. The former State-owned company racked up €4.1 billion of debt through a series of changes in control before it filed for examinership in 2012, resulting in €1.8 billion of its borrowings being written off.

A spokesman for Eir declined to comment, while calls to Anchorage and fellow major shareholders, New York hedge fund Davidson Kempner and GIC in Singapore, in recent days weren’t returned.

Eircom timeline: from State company to private telecom – page 3