Float values telecom firm Eircom at up to £840m

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Eircom, the dominant telecoms business in Ireland, yesterday announced the pricing range for its planned flotation which will value the company at up to €1.26bn (£840m).

The company said its shares would be priced between €1.48 and €1.75 when it came to market in London and Dublin on 19 March. Investors are looking at the stock for its strong dividend yield, which is expected to be about 6.8 per cent. It is also expected to have strong free cash flows thanks to its dominant position in Ireland's fixed- line telecoms market. Growth prospects are seen coming from its strong position in broadband internet services, which launched in Ireland in January and are expected to drive gross margins higher.

Eircom was taken private less than three years ago by a consortium including Soros Private Equity and Sir Anthony O'Reilly, the chairman of Independent News & Media, the owner of The Independent.

The company has embarked on a reorganisation that should see its headcount fall from 8,200 to 7,000, with debt levels planned to fall from the present €2.2bn thanks to the company's cash flows.

At least 40 companies have either launched or are planning to launch IPOs this year, with many more expected to emerge in the months to come.

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