Blackstone will retain a 5 percent stake in the company, the source said.

The sale makes Anchorage the company's biggest shareholder, a spokesman for Eircom said on Wednesday. He declined to comment further.

Anchorage entities held an 8.02 percent stake in Eircom, according to the company's annual report published in June.

New York-based Anchorage Capital spokesman Jonathan Gasthalter declined to comment.

Eircom said on Tuesday that it rejected a takeover offer of between 3.2 billion and 3.3 billion euros from an unnamed bidder because it undervalued the business.

The Dublin-based company has had a chequered history with flotations.

It pulled out of an initial public offering last year after appointing investment banks to examine what would have been a third flotation in 15 years, saying key shareholders hoped to earn better returns on their investment in the future.

Eircom's foray into privatisation in 1999 saw shares collapse after an initial public offering marketed as a one-way bet to the Irish public. The company was bought out two years later by a consortium led by former Irish media tycoon Tony O'Reilly.

The company built up its unsustainable debt during a series of changes of ownership and briefly refloated in 2004, again lasting two years before delisting as Ireland's credit-fuelled boom ran out of steam and a financial crisis enveloped it.

After filing for creditor protection to restructure 3.75 billion euros of debt in 2012, Eircom was taken over by its senior lenders, including Blackstone.

The examinership — akin to the Chapter 11 bankruptcy process in the United States and administration in Britain — was the largest in Irish corporate history and saw nearly all of Eircom's junior debt wiped out.

(Reporting by Freya Berry in London and Aashika Jain in Bengaluru; Editing by Sriraj Kalluvila and Mark Heinrich)