Hull telecoms company KCOM backs new £563m takeover bid

Hull is unique in the UK having a telephone system which uses cream, not red, phone boxes

Hull-based telecoms company KCOM has ditched a takeover by one of Britain's biggest pension funds after a new offer added almost £60m to its value.

The firm - famous for its cream-coloured phone boxes - had previously backed a £504m bid by the Universities Superannuation Scheme (USS).

But its board is now supporting a £563m bid from Macquarie Infrastructure and Real Assets (MIRA).

KCOM holds a monopoly over telecoms in Hull and other areas of East Yorkshire,

The company provides voice and internet-based services to 140,000 consumers and businesses across the city - the only part of the UK where larger rival BT does not have a presence.

More than 50,000 people in Hull bought shares in KCOM when it floated on the London Stock Exchange in 1999 with a share price of 225p.

The new offer values its shares at 108p each, up from the 97p-a-share offer tabled by USS in April.

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Patrick De Smedt, interim non-executive chairman of KCOM, said: "This offer provides our shareholders with even greater value in cash for their shares, as well as providing KCOM with a strong partner as we work to maintain, build and enhance our offering and position."

MIRA spokesman Leigh Harrison said: "KCOM has a strong local heritage that has been developed over more than a century and is well-positioned to continue to meet the evolving telecommunications needs of the region."

It comes after the company issued a profit warning late last year that was followed by a string of management changes, including the replacement of its chief executive and finance chief.

In its half-year report last year, KCOM reported a fall in profits, while net debt soared 60% to £108.5m due to investment in infrastructure across its Hull and East Yorkshire network.

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