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CityFibre agrees £538mln takeover by consortium to support fibre broadband roll-out

The offer for CityFibre represents a 93% premium to its closing share price on Monday
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CityFibre is building its own fibre-optic network in the UK in competition with BT

British fibre broadband company CityFibre PLC (LON:CFHL) has agreed a £538mln takeover by a consortium of infrastructure investors.

Connect Infrastructure Bidco Limited – a consortium formed by private equity firm, Antin Infrastructure Partners, and Goldman Sachs’ West Street Infrastructure Partners – offered 81p a share in cash for CityFibre.

The deal represents a 93% premium to CityFibre’s closing share price of 42p on Monday.

CityFibre’s chairman Chris Stone said in a statement that the takeover meant the company would no longer be constrained by funds as it builds its own fibre-optic network in the UK in competition with BT Group PLC (LON:BT.A).

Last year, CityFibre joined forces with Vodafone PLC (LON:VOD) to build a new ultra-fast broadband network for five million homes and businesses in the UK.

READ: Vodafone takes aim at BT through lightning fast telecoms network deal with CityFibre

CityFibre will build, own and operate the network with Vodafone having exclusive rights to market ultrafast consumer broadband services for a set period.

“Under private ownership, CityFibre will be able to gain alternative and potentially easier access to the financing required for its announced FTTH (fiber-to-the-home) deployment,” Stone said.

“This will strengthen the company’s ability to deliver on its vision to provide full fiber infrastructure to 20% of the UK market.”

Separately, CityFibre published its full year results on Tuesday, which showed turnover more than doubled to £34.8mln last year from £15.4mln in 2016. Turnover included a five-month contribution of £15.4mln from newly acquired wholesale fibre company Entanet.

Adjusted core earnings rose to £4.5mln from £2.5mln.



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