Wednesday 24 April 2019 6:58 pm | Updated: Monday 03 June 2019 12:36 am

Shares in telecoms firm Kcom surge as it approves buyout deal

Hull-based telecoms company Kcom has agreed to be taken over by a pension company for £504m, it announced today.

Shareholders in Kcom will be entitled to receive 97p per share in the company under the terms of the takeover by the Universities Superannuation Scheme (USS), which is supported by the Hull company’s two biggest shareholders.

The news sent London-listed Kcom’s shares rocketing 34 per cent higher to a price of 97.4p, reflecting the significant premium USS would be paying compared to the previous day’s closing price of 72.5p.

Kcom is the major telecoms provider in Hull, where the city’s football and rugby stadium is named after the company, which is the sole city in the UK not serviced by BT.

The company has been investing heavily in infrastructure over the last year. This contributed towards a rise in net debt and fall in profits revealed in its half-year report last year. Its shares had fallen by a third when it issued a profit warning weeks before.

Mike Powell, head of the private markets group at USS’s investment manager, said: “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.”

Patrick De Smedt, interim non-executive chairman of Kcom, said: “The Board unanimously recommends that shareholders accept the offer.”

He said the offer “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.”