KCOM board directors have agreed an acquisition deal with the Universities Superannuation Scheme (USS) subsidiary, Bidco, worth £504m.

The directors intend to unanimously recommend that KCOM shareholders vote in favour of the deal, after being advised by Rothschild & Co.

The deal equates to 97 pence per share and a premium of 38 per cent, compared to the average share price over the last three months.

Commenting on the announcement, KCOM interim non-executive chairman, Patrick De Smedt, said: "The board believes that USS'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 97 pence 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.”

In order to proceed with the deal, at least 75 per cent of shareholders will need to vote for approval in both the court meeting and the general meeting. It is also subject to approval from the High Court.

USS Investment Management Limited head of the private markets group, Mike Powell, added that USS believed KCOM to be “a high-quality business” that is “well placed to grow and thrive under private ownership”.

He continued: “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.

“USS's track record as a long-term and supportive shareholder with extensive experience in regulated sectors makes us an ideal partner for KCOM."

Share Story: