KCOM dumps pension-fund backed buyout in favour of Macquarie bid

clock • 2 min read

Any advance on £563m?

KCOM has shoved aside a £504 million takeover by a subsidiary of the Universities Superannuation Scheme, agreed in April, in favour of a £563 million bid from Macquarie Infrastructure.

The Hull-based communications company withdrew its recommendation of the April offer in favour of a bid, instead, from Macquarie Infrastructure, an investment fund controlled by the Australian bank Macquarie.

The April bid, from Humber Bidco, a special-purpose vehicle set-up by the Universities Superannuation Scheme, had represented a 34 per cent premium on KCOM's stock price prior to the news of the offer. It had been recommended by the KCOM board to stockholders.

That bid, furthermore, had also been approved by two of KCOM's biggest shareholders, representing more than one-quarter of the company's shares.

KCOM is formerly Kingston Communications, a telecoms operator founded in 1902 by Hull Corporation, later to become Hull City Council, to provide a phone service to the city of Kingston upon Hull.

While Kingston Communications was one of just many municipal phone services founded at the beginning of the 20th century, the rest were all quickly absorbed into the Post Office Telephone department, later to become BT.

It was granted a monopoly in the city, became the UK's first fully digital network in 1989 using Marconi System X switches, and was floated on the London Stock Exchange in 1999.

In recent years, though, it has struggled. Ambitious plans to expand across the UK with its own fibre network were brought to a close in 2015 when it sold out its network in 24 cities across the UK - outside Hull - to CityFibre in a £90 million deal.

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