Maxim_Kazmin - stock.adobe.com
KCOM heading into private ownership
Telco specialist indicates it is supporting an offer from a large pension fund player to take the business into private hands
The decision by KCOM to recommend an offer to go private from one of Britain's largest pension fund providers could cap what has been a difficult recent period for the telco specialist.
The firm had been expected to share a strategy from CEO Graham Sutherland, appointed last October, and CFO Anna Bielby, tomorrow but that has been cancelled given the indications that the firm is taking a £504m offer from Humber Bidco Limited a wholly-owned indirect subsidiary of Universities Superannuation Scheme Limited.
KCOM issued a profit warning last year and turned to former BT executive Sutherland to help change its fortunes after sharing a half year update issued back in November showing that revenues were down and pre-tax profits had also declined by 4% year-on-year.
The firm provides voice and data services to 140,000 customers in Hull and East Yorkshire, has a public sector and large enterprise customer lost across and through its national network services provides UK wide connectivity support.
Patrick De Smedt, Interim Non-executive Chairman of KCOM, said that the Board was giving the offer its backing because of the potential to improve the fortunes of the firm.
"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," he said.
Mike Powell, head of the private markets group at USSIM, said that it saw plenty of potential in KCOM and going private would benefit the business.
"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," he said.
Powell also indicated that this investment was made with a view on the longer term: "USSL's track record as a long-term and supportive shareholder with extensive experience in regulated sectors makes us an ideal partner for KCOM".
