BREAKING NEWS

BREAKING NEWS

Pension fund USSL to buy KCOM Group for about £504 million

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(Reuters) - Universities Superannuation Scheme Ltd (USSL), one of Britain's biggest pension funds, said on Wednesday its unit Humber Bidco would buy telecommunications company KCOM Group Plc for about £504 million.

Shareholders of KCOM will get 97 pence in cash for every share held, a premium of 34 percent, the companies said.

KCOM's directors intend to urge its shareholders to vote in favour of the deal which they called "fair and reasonable", the companies said.

After the deal announcement, KCOM shares swiftly gained one third in value and were trading at 96.9 pence a share by 0204 GMT, nearly matching the offer value.

The stock is on course for its best day in nearly two decades.

The deal follows a Telegraph report in February that said Virgin Media was exploring a takeover of the IT and communications services provider to accelerate its network expansion programme.

Started in 1899 as the telephone department in Hull Municipal Corporation, KCOM now offers managed network and cloud-based services across the UK.

In its half-year report last year, the company reported a fall in revenue and profits, while its net debt soared 60 percent to 108.5 million pounds, partly due to investment in infrastructure.

Rothschild & Co was acting as financial adviser to KCOM and Gleacher Shacklock and Arma Partners to USSL.

(Reporting by Samantha Machado and Muvija M in Bengaluru; Editing by Bernard Orr and Shinjini Ganguli)

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