Frenzied bidding war for hot property KCOM as share price rockets by tuppence and a half

The bidding war for East Yorkshire-based broadband provider KCOM is heating up as suitors increase their offers by a penny here and half a penny there. Clearly this is not the sort of thing management at London-listed KCOM had in mind when they launched an auction at the weekend, presumably with dreams of cashing in. Humber …

[m0rt]

Soooo....£571M offer for a company that has 140K customers. So that works out at valuing each customer as £4K.

I'm obviously no businessman because I fail to see the attraction at that price.

[Jonathan Knight]

KCOM is a bit wider than just the Hull telephone system. They also manage a number of corporate networks including the North Midlands Hospital Trust

https://www.kcom.com/our-customers/public-sector/university-hospitals-of-north-midlands-nhs-trust/

[macjules]

Given that KCOM runs a genuinely high speed service (as opposed to the BT "1.5Mbps is all you need for broadband") I am not at all surprised. First company in the UK to provide Digital exchanges, ADSL, and the first to provide full FTTH etc.

Wiki page: The FTTH offering provides 400 Mbit/s service to residential customers and 1 Gbit/s service to business customers, with the remaining 4% of customers able to receive 75 Mbit/s VDSL2 service.

A shame that BT are not even remotely close to that in terms of competency.

[ArrZarr]

If you're on lightstream, then life on the web is gravy.

If you're not, then life on the web is gravelly.

I moved south of the Humber to get out of KC's monopoly* area and it's well worth paying the bridge toll every day to be with Zen.

*Techincally it's not a monopoly but practically, it is.

[phuzz]

"£571M offer for a company that has 140K customers. So that works out at valuing each customer as £4K."

Isn't it also worth including if the company has any assets that might be worth something? Like, I dunno, a whole bunch of infrastructure? Some offices? That sort of thing.

[Anonymous Coward]

The Hull business is just over a third of their income (£104M in 2018), they also have a national network (SDN on other providers, £113M in 2018) and an Enterprise division (£88M in 2018)

https://www.kcomplc.com/ar18/media/pdf/kcom_ar18_performance_review.pdf?

[caffeine addict]

That's about £300m. I thought the normal guide for buying a company was x7 annual revenue?

Or was that profit? Or in the 70s? Bah... I need beer...

[Anonymous Coward]

Of course you know who'll end up paying either way.

Here's a clue, there's 140,000 of them.

[Anonymous Coward]

I use KCOM in the south of England

...because they bought out Eclipse Internet.

And its really hard to move ISPs when you have umpteen static IP addresses and locked-in domain hosting with abysmal UI.

[anothercynic]

Re: I use KCOM in the south of England

I feel for you... I moved to A&A from Eclipse; try and get in touch with them to see if they can help make your move easier?

[Jove]

Hold out ...

Given the parties that are involved in the bidding, they should hold out for a much higher figure - they will be aiming to to sell it on for a substantial profit over what they are offering. They may hold on to it for the medium term, but they would be cutting every penny they can out of the operating costs.

[jabuzz]

Re: Hold out ...

The USS pension scheme are very unlikely to be looking for anything other than long term revenue generation.