£504 million deal on table for KCOM
That KCOM was in a position to be purchased is no great shock since Liberty Global (aka Virgin Media) was known to be in the running, but a share offer of 97p per share valuing KCOM at £504 million by Humber Bidco who are a subsidary of the Universities Superannuation Scheme has been made. The offer is receiving a recommendation for shareholders to accept by the current KCOM board.
KCOM is at the end of its FTTP roll-out so the sale is at a different point compared many of the pension schemes that are investing into a number of full fibre providers who are rolling out elsewhere. The shift now in the Hull area will be around getting people to sign up to the Lightstream packages and retirement of the existing copper network as well as rolling out to the difficult final few premises, with KCOM as the only superfast option for most people in Hull the take-up is already good, as only 17.2% of speed tests from KCOM customers in Q1 2019 were on the ADSL2+ network.
The acquisition comes with a promise that the KCOM HQ will remain in Hull, but with a workforce now well trained in deploying FTTP we suspect that some of the value may be in taking on civils contracts to install FTTP in other parts of the UK. An expansion by KCOM outside the Hull area seems unlikely and the closest other urban areas without crossing the Humber are York, Leeds and Wakefield.