The High Court will give its decision this morning on an attempt to halt today's planned sale of Cablelink for more than £525 million (€666 million) to US-based NTL Communications. The deadline for acceptance of the NTL offer is 5 p.m.
Submissions concluded yesterday on an application by Howberry Lane, the Esat-led consortium formed to acquire Cablelink, for an injunction restraining the sale of the company to NTL - or to any other party on the basis of a "formula bid" - pending the outcome of legal proceedings.
The President of the High Court, Mr Justice Morris, should deliver his ruling today.
During the three-day hearing, Howberry claimed the owners of Cablelink - Telecom Eireann and RTE - were not entitled to sell to NTL because that company had tendered an invalid "formula bid" for Cablelink in that it offered to pay 15 per cent more than the highest offer. Howberry said it had the highest valid bid (£410 million) on April 23rd, the initial date set for submission of final bids, and its bid should be accepted.
On April 26th, selling agents NM Rothschild asked all five bidders to submit revised final bids by April 27th. Howberry bid £485 million, while NTL offered more than £525 million. Last week, the court was told it was proposed to sell Cablelink to NTL.
Opposing the injunction application yesterday, Mr Donal O'Donnell SC, for NTL, said its bid was entirely consistent with the tender procedures set out in letters and documents from the vendors which were not questioned by Howberry until late in the process.
In the process, Telecom and RTE were not seeking marks for good behaviour from bidders, he said. They wanted the best price and not to exclude people for imprecision.
Under the terms of the process, NTL's bid was perfectly valid, he said. The words used did not exclude a referential bid. It was hard to see how there was any unfairness. Howberry was wrong to claim they could not have succeeded as a result of NTL's bid - they could have offered to pay 16 per cent more than the highest bidder.
It was "extraordinary" that Howberry was urging the court to exclude NTL from buying Cablelink on the basis of an allegedly invalid bid when Howberry's own bid was invalid. It was Esat Telecom Group which was initially asked to tender for Cablelink, not Howberry, which did not exist when the bidding process started. Howberry had approached the process in a relaxed way and could not now seek its rigorous enforcement.
It would be extraordinarily unjust if NTL were to be held down by an injunction while Howberry could proceed. The cornerstone of a court of equity was to avoid injustice. To suggest that there was some sinister procedure undertaken to skew the bidding process was mistaken.
Earlier, Mr Dermot Gleeson SC, with Mr Paul Gallagher SC, for Telecom/RTE, said the deadline for acceptance of four of the five bids offered was 5 p.m. yesterday. The deadline for acceptance of NTL's offer is 5 p.m. today.
If the injunction was granted, it would "fatally torpedo" the bidding process which began in January, counsel said. A new bidding process could be started but the vendors had no power to keep particular bidders interested and the dynamism of the present process could never be recreated.
He rejected Howberry's claim that NTL's April 23rd bid of £471.5 million should have been excluded because it was not stated in Irish pounds but calculated at 15 per cent above Howberry's £410 million bid. The NTL bid was "perfectly precise" and capable of being calculated in Irish pounds.
He also submitted the vendors had ensured in the tender documents that no contractual obligations would be imposed on them until the end of the process. Esat had mistaken the tender process for a process of sale.
The process was "seriously fair", in fact involved "an excess of fairness", he argued. The vendors could have accepted NTL's £471.5 million bid but allowed all other bidders submit revised final bids and also allowed an invalid Esat bid to remain in the process.
All bidders were treated equally, Mr Gleeson said, rejecting several specific allegations of unfairness including an allegation of a secret deal with NTL regarding payment of dividends. He denied any bias was exhibited towards Esat.
He said the mere appearance of Telecom Eireann and RTE in the title of case did not bring it into the arena of public law or the law on public procurement and legitimate expectation. This was a sale of shares to the private sector from an owner which happened to have a public sector existence of some sort.
The injunction should not be granted because Howberry's central objective - to force the vendors to sell Cablelink to it for £410 million - could not be directed by a court, Mr Gleeson argued.
Replying for Howberry, Mr Bill Shipsey SC, said his case was that he had a contract with Telecom/RTE to buy Cablelink and he had legal authorities to support that. He was also relying on the legal principle of legitimate expectation. It was extraordinary to claim there was no fair issue to be tried.
This was a fixed bidding situation, not an auction, and referential bids such as that from NTL on April 23rd were not allowed. The defendants were arguing it was valid but a further "final final bid" was necessary to remedy any possible illegitimacy. The decision to go to that round was to remedy a defect.
Government guidelines on contracts and property transactions were relevant, as were principles underlying procurement.
It was extraordinary for the sellers to argue they could do as they wished in the tendering process and that commitments in the tender documents about openness and transparency were meaningless.
