KCOM goes (for the final time) to Macquarie for £627m in Takeover Panel-managed auction

KCOM auction adds £123m to price on opening offer filed in April

Hull-based telecoms company KCOM has finally been sold for £627 million - a 24 per cent increase on the initial £504 million offered by Humber Bidco back in April.

And that opening bid had represented a 34 per cent premium on the company's prevailing share price at the time.

The auction was overseen by the Takeover Panel, in a process started on 7^th June, days after Macquarie had slapped a bid of £563 million on the table.

Macquarie unit MEIF 6 Fibre Ltd, the special-purpose vehicle set-up by Australian investment bank Macquarie to pursue the bid, ultimately offered 120.3 pence per share against Humber Bidco, a special purpose vehicle set-up by Universities Superannuation Scheme Ltd (USSL), which filed a final bid of 113 pence.

Humber Bidco had opened up the sale back in April, with a deal initially agreed with the board of KCOM. That ultimately flushed out other interested parties.

The winning bidder Macquarie has multiple investments in infrastructure in the UK, but has also been dubbed "the vampire kangeroo" for alleged asset stripping, loading up the companies it acquires with debt, taking out as much money as possible, before selling them on. Macquarie has also invested in Arqiva, INEA in Poland and TDC in Denmark.

The high price pinned on KCOM reflects the value placed on its full-fibre assets in Kingston-upon-Hull, East Yorkshire where it enjoys a near-monopoly for historic reasons. The company provides telecoms and high-speed internet to around 140,000 customers in Hull and East Yorkshire

In addition to KCOM, Manx Telecom and CityFibre have also been taken private at high valuations in recent years, as investors look for partially or fully built-out fibre communications networks, leaving BT to belatedly catch-up.

At one point, Virgin Media was thought to be interested in acquiring KCOM, but did not join the bidding war.