One of the UK’s few remaining listed telecoms companies is set to go private after recommending a bid from an infrastructure fund that specialises in marine and energy companies.
Manx Telecom, the main operator in the Isle of Man, has accepted a £255m cash offer from Basalt Infrastructure Partners. It has been listed since 2014 and is the latest UK telecoms company to be bought by an infrastructure fund, after the acquisitions of CityFibre and Gigaclear. Infrastructure investors have also backed smaller groups including Community Fibre, Hyperoptic and Airband.
Manx shares surged 15 per cent to 214.66p on the news, although still shy of the 215p offer price.
Basalt owns the Wightlink ferry company that operates between the UK mainland and the Isle of Wight. It also owns North Star Shipping, which provides emergency services for the North Sea oil and gas industry, the Madrid Metro light rail in the Spanish capital and a number of energy assets in the US and Europe. It had not invested in telecoms until the Manx offer.
It first approached the company in January, according to Manx chief executive Gary Lamb, before agreeing the sale at a value equivalent to 11 times projected earnings. Manx, which has previously been owned by private equity companies HgCapital and CPS Partners, did not sound out other potential buyers as the bid was unsolicited.
Mr Lamb said the deal made sense given that the company would struggle to invest in upgrading its network to 5G and full fibre optic connections while maintaining its progressive dividend policy, which has been an attraction for investors. It is also investing in a start-up business called Goshawk that aims to improve mobile phone services for hard of hearing users.
He said that laying full fibre across the island would cost about £30m and ensure that Manx remained dominant in its home market.
Manx was founded in 1986 as a part of BT but was included in the O2 demerger at the turn of the century and was a test bed for 3G networks. It was sold to private equity in 2010 after Telefónica bought O2. The price offered, which excludes £63m of debt, is 51 per cent higher than its float price, according to Megabuyte research.