Pensions scheme swoops for listed telecoms firm in £504m takeover deal

A pensions firm has acquired Hull-based listed telecoms business, KCOM, in £504m takeover.

Humber Bidco (Bidco) a subsidiary of Universities Superannuation Scheme Limited (USSL) has reached an agreement with KCOM to purchase the company for 97p per share. KCOM’s board of director advised shareholder to approve the offer and it is expected to complete later this year.

Patrick De Smedt, Interim Non-executive Chairman of KCOM, said: “The Board believes that USSL’s offer for KCOM provides, on completion, both meaningful, guaranteed cash returns for shareholders as well as a strong, supportive partner in our endeavours to take the business forward to new successes.

“The Board believes that the offer of 97p per share represents a compelling opportunity for shareholders to realise an attractive cash value in respect of their shares and recognises the quality of KCOM’s businesses and the strength of their future prospects.  For all these reasons, the Board unanimously recommends that shareholders accept the offer.”

USSL, through its investment manager, USS Investment Management Ltd (USSIM), is a long-term owner of assets with a track record of investing in UK infrastructure and infrastructure-like businesses.

Mike Powell, Head of the Private Markets Group at USSIM, said: “We believe that KCOM is a high-quality business that is well-placed to grow and thrive under private ownership and that is why we have made this compelling offer to shareholders at an attractive premium.  With the right capital support and assistance, we believe that KCOM’s management will be able to enhance the quality of its offering, delivering benefits for customers as well as sustainable, long-term returns.  USSL’s track record as a long-term and supportive shareholder with extensive experience in regulated sectors makes us an ideal partner for KCOM.”

Allen & Overy was legal adviser to USSL and Humber Bidco. Addleshaw Goddard was legal adviser to KCOM. Arma Partners, an independent M&A advisory firm, is acting as financial advisor to Humber Bidco.

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