The way for a bid was opened after Eircom brought forward its results last week.

Eircom posted a 41% increase in full-year profits to 82m, from 58m in the previous financial year. Sales rose 6% to 1.69bn.

Eircom said it had 250,000 broadband Internet customers as of 12 May and said it's maintaining a forecast to double the figure by December 2007 as part of a strategy to boost fixed-line revenue.

"We keep investing in broadband and at some point it will become profitable, " said chief executive Phil Nolan. "It's growing very consistently at the moment."

Citigroup described Eircom's operating performance in the past financial year as "robust", as the telco released results to the end of March last Monday.

Analysts pointed out, however, that restructuring costs were 20m higher than anticipated and that depreciation costs were up "sharply" due to the integration of the newlyacquired Meteor mobile unit, and a reduction in asset lives.

Eircom's stock rose to 2.15 following the results announcement, and closed on Friday at 2.16.

The shares have risen more than 34% in the past 12 months. Citigroup maintained that Eircom is trading at a 10% premium to fair value due to the confirmed interest of Babcock & Brown.