Hutchison Whampoa Ltd has made a 2 billion euro ($2.6 billion) bid for Eircom Group Ltd, the Irish phone company that was granted court protection from creditors, Bloomberg reported.
The cash offer by Hutchison's Three Ireland unit was rejected by Ireland's court-appointed examiner overseeing the reorganization because there were too many conditions attached, the report added, citing people with knowledge of the matter.
Eircom was granted court protection from creditors at the end of March to allow it to restructure 3.75 billion euros ($5 billion) of debt.
Hutchison, controlled by Asia's richest man Li Ka-shing, has been steadily buying European businesses. In February, it bought Orange Austria from France's Telecom and a private equity fund in a deal valued at $1.3 billion euros including debt.
It derived 42 percent of its 2011 revenues totalling HK$387.7 billion ($50 billion) from Europe. Out of total revenues, its 3 Group telecom business in Europe contributed 15 percent.
Hutchison's shares were down 0.4 percent in late morning trade, compared with a 0.8 percent fall in the benchmark Hang Seng index.
Hutchison has wireless operations in Ireland and a deal would help the Hong Kong company to consolidate its operations there, a person who has worked on telecom deals said. But a 2 billion euro offer would represent a "pretty big hair cut" to the debt holders, the person added.
A Hutchison spokesman in Hong Kong declined comment.
Statutory accounts for Eircom Ltd, showed it has recognised a new provision of 2.5 billion euros debt related to loan guarantees for the Eircom group. This, and a non-cash impairment of 370 million euros relating to its Meteor Mobile business, lead to an operating loss of 2.86 billion for the year to June 2011.
Launched in 2005, Three Ireland is a mobile operator and runs a high-speed network. So far, Hutchison has invested 800 million euros in building its network, according to the company's website www.3ireland.ie.
This article is copyrighted by Reuters
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