Australian investment firm Macquarie is considering a sale of Hull-based fiber provider KCOM.
As reported by The Telegraph, Macquarie has appointed advisory-orientated investment bank PJT Partners to oversee a strategic review of KCOM, with a view to a potential sale.
Macquarie could even explore a knock-down sale of KCOM, reports the publication. The investment firm acquired the telco back in 2019 for £627 million ($774m) in 2019 after fending off a rival bid from pension fund Universities Superannuation Scheme (USS).
KCOM has long held a monopoly in its home city of Hull, and is the only city in the UK not served by Openreach's network, after KCOM refused to merge with other regional providers during the formation of the former telecoms monopoly. Notably, the city's telephone boxes are even a different color.
Founded in 1904 as Kingston Communications, KCOM has seen its dominance in the region challenged in recent years by several rival full-fiber network providers, also known as alt-nets. Cityfibre, Connexin, Grain, and MS3 Networks are some of the alt-nets building out their rival networks in the city.
KCOM has around 133,000 customers in the UK, while The Telegraph reports its current earnings at around £50m ($61m). Virgin Media O2 and CityFibre are reportedly potential suitors if the company is indeed put up for sale.
Virgin Media O2 has previously said it's open to consolidation, with Mike Fries, chief executive of the operator’s co‑parent Liberty Global, stating in November that "another six or seven" alt-nets are on its radar as potential acquisition targets.
The company was linked with a takeover of CityFibre last March, in a deal worth around £3 billion ($3.78bn), plus a £100 million ($125m) takeover of broadband company Trooli.
In 2015, KCOM sold most of its fiber network to CityFibre for £90m ($112m) in a cash sale.
The acquisition covered 1,100 km of duct and fiber cables across 24 UK cities, plus another 1,100 km of national long-distance networks that connect these cities to major data center locations across the UK.
KCOM owner Macquarie owns other infrastructure assets in the country, including Thames Water, which is on the brink of collapse. Macquarie has faced scrutiny over its ownership of the utility company, after loading it up with debt.
