June 3, 2019 / 7:03 AM / 3 months ago

UPDATE 1-KCOM opts for sale to Macquarie unit, drops USSL-backed bid

(Adds details of previous offer, background on deal)

June 3 (Reuters) - Telecom network and cloud-based service provider KCOM Plc has ditched plans for a sale to British pension fund-backed Humber Bidco in favour of a higher offer backed by investment firm Macquarie’s European Infrastructure Fund, KCOM said on Monday.

The offer from Macquarie-backed MEIF 6 Fibre Limited amounts to 108 pence per share for KCOM, 11 pence higher than that submitted by Humber Bidco, owned by British pension fund Universities Superannuation Scheme Ltd (USSL), KCOM said.

MEIF’s offer values the company at 563 million pounds ($710.90 million) and represents a 49% premium to KCOM’s closing price on April 23, the day before Humber Bidco announced its offer for the firm.

Macquarie funds have been investors in critical telecom infrastructure since the early 2000s, including investments in European players Arqiva, Poland-based INEA and Denmark’s TDC.

In April, USSL said Humber Bidco would buy KCOM for 504 million pounds, with KCOM’s largest investor and Europe-focused activist Teleios Capital backing the offer.

KCOM issued a warning on profit last year after a slew of management changes including the departure of its chief executive officer and finance chief.

Former BT Plc executive Graham Sutherland was appointed as chief executive in October and he announced a review of KCOM’s business strategy a month later.

$1 = 0.7920 pounds Reporting by Sangameswaran S in Bengaluru; editing by Patrick Graham

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