USS sidelined as Macquarie’s £563m offer for KCOM is accepted

The British pension fund in April agreed a £504m offer for the UK-based communications group, but Macquarie’s bid was deemed a ‘superior proposal’.

Macquarie Infrastructure and Real Assets has agreed a £563 million ($706.3 million; €631.4 million) deal to acquire KCOM, despite the listed digital communications group having accepted an offer in late April from UK pension fund Universities Superannuation Scheme.

KCOM’s directors have withdrawn their recommendation of USS’s $594 million offer. The board is now unanimously recommending that shareholders approve Macquarie’s offer. The firm is bidding through its Macquarie European Infrastructure Fund 6, which is believed to be nearing a close of around €6 billion.

Macquarie’s bid represents a 49 percent premium on KCOM’s last day of trading prior to the offer and an 11 percent premium on USS’s offer. In a statement, Macquarie cited KCOM’s ownership of critical infrastructure, including the roll-out of fibre broadband connection in Hull in the north of England, as one of the reasons it wished to invest in the company.

Macquarie is looking to increase third-party access to KCOM’s network infrastructure to increase retail competition. It said it sees the acquisition of KCOM as being “complementary” to its existing ownership of the Race Bank offshore wind farm, which is also based in the region, and the Humber Port owned by Macquarie’s HES: “These organisations all provide infrastructure and employment opportunities that contribute to the ever-growing Northern Powerhouse.”

USS, which invested alongside Macquarie in the acquisition of the Green Investment Bank in 2017, declined to comment.

KCOM has been listed on the London Stock Exchange since 1999. It provides fibre broadband access across the Hull region, as well as cloud computing and IT solutions.