BT splashes out £130m on Ocean

BT has agreed to buy the remaining 50 per cent stake in Ocean - its joint venture with the Electricity Supply Board (ESB) - for £130m.

ESB had threatened to take the UK telco to court after it made a $2.5bn white knight offer for rival telecoms firm ESAT two weeks ago - BT entered the bidding to save it from a $1.9bn hostile bid by Telenor. It claimed the bid breached the terms of the Ocean joint venture and court action could have put an end to the ESAT deal.

However, the two firms agreed a price and BT now looks likely to own the second- and third-largest telecoms suppliers in Ireland, depending on Irish and European regulatory approval.

Although it has not stated its intentions for the Irish market, BT has indicated that a merger would be a possibility.

The UK telco said it is confident that there will be no regulatory issues. However, Susen Sarkar, senior analyst at Yankee Group Europe disagreed.

"The Irish government won't allow BT to have control of both the telcos. I shouldn't think it would be happy for it to merge the two companies either. And given the choice BT is most likely to sell Ocean, especially as it came in as a white knight for ESAT," he said.