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Author Topic: Infrastructure Fund Set to Buy UK Rural Fibre ISP Gigaclear for £270m  (Read 224 times)


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The M&G Investment Management fund has offered to buy ultrafast fibre optic (FTTP) rural broadband ISP Gigaclear for £270 million (all cash), which is backed by the UK operator’s largest shareholder Infracapital (43.2% holding). The offer is due to be discussed next week.

    Infracapital Statement on Gigaclear Offer

    The Offer:

    – Represents:

    * a 23% premium to the most recent fund raise in 2017, at 325p per share; and

    * a 545% premium (a multiple of over six times) to the early subscription by seed and EIS investors at a price of 62p per share paid by the majority of the non-institutional shareholders.

    – Is an opportunity for those shareholders wishing to realise substantial gains, particularly where the applicable three year holding period for EIS purposes has expired.

    – Provides a liquidity opportunity for shareholders:

    * Gigaclear’s shares are not listed and there is no recognised market for its shares;

    * the Company plans to raise substantial further capital to finance its medium term business plan and it is not obvious when another material liquidity event may occur in the short to medium term for existing shareholders.

    – Enables individual shareholders to sell shares in a more tax efficient manner (especially those who expect their shares to qualify for EIS treatment) than the share buyback suggested in the Company’s circular to shareholders dated 30 November 2017.

    – Ensures that the cash proceeds from the Company’s proposed 2018 fund raise can be invested fully in the expansion of the business and its rollout plans (rather than the proposed share buyback).

    Infracapital is committed to the Company and intends to continue to support the Company, through the exercise of its pre-emption rights and participation in future fund raises, as it has done since its initial investment in Gigaclear in 2015. Access to such capital has been a key ingredient in the Company’s ability to grow at such a fast rate historically.

Hopefully this move will strengthen Gigaclear to move forward at a more rapid pace now they have a more solid financial base to work from.

It's been said that its the same investment company that TalkTalk have, and speculation TT could be the first to roll out full fibre, though I think that might be a pipe dream at the moment.
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