KCOM is set to be taken over by pension fund Universities Superannuation Scheme Ltd (USSL) in a deal worth £504 million.
The Hull-based telco has recommended its shareholders approve the deal, ending 20 years as a publicly-traded company.
“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,” said Patrick De Smedt, interim non-executive chairman of KCOM.
“For all these reasons, the Board unanimously recommends that shareholders accept the offer."
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Speculation regarding a takeover had intensified in recent months following a major profit warning issued last year, followed by a series of management changes. Virgin Media was one of the reported suitors, as the acquisition would allow it to enter an entirely new market.
BT and Virgin Media do not operate telephone or broadband services in Hull due to KCOMs historic advantage in the city. As a condition of its licence renewal in 1914, KCOM was required to purchase the local telephone infrastructure, whereas other regional telecom groups were absorbed into the General Post Office (GPO), which became BT.
A key difference, aside from white phone boxes, is that KCOM has used Fibre to the Premise (FTTP) for its superfast broadband rollout, rather than the Fibre to the Cabinet (FTTC) deployed by Openreach.
This means large parts of the region has access to some of the fastest speeds in the UK, but critics argue the company enjoys a monopoly – even though it is required to provide wholesale access to its infrastructure.
KCOM is expected to deliver the proposed universal service obligation (USO) to Hull and East Yorkshire, with Openreach covering the rest of the country.
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