Marconi deal raises Atlantic's value by 70%

ATLANTIC TELECOM, the Aberdeen-based wireless telephony company, soared in value by almost 70 per cent yesterday after Marconi agreed to take a 27 per cent stake in the business and link it to its nationwide fibre optic network.

Shares in Atlantic Telecom, which has just 40,000 customers and revenues of pounds 20m a year, rose by 332p to 815p, valuing the company at pounds 690m. Twelve months ago it was worth less than pounds 90m.

The deal will transform Atlantic Telecom from a "local loop" operator largely confined to Scotland into a national player with a long-distance broadband fibre network connecting 40 of the biggest cities in England and Scotland. Marconi, formerly known as GEC, is to pay Atlantic Telecom pounds 50m in cash for 39 million shares worth pounds 172m and provide Atlantic with pounds 50m of finance to buy Marconi software and switching equipment. In addition it is granting Atlantic a 20 year licence to use its fibre optic network, built originally by GEC along canal towpaths.

The network, which stretches from London and up through the Midlands to Glasgow and Edinburgh in a figure of eight, matches the towns where Atlantic is already operating or has licences to start a service. It is currently operating in Glasgow, Edinburgh, Dundee and Edinburgh but has licences to launch services in half a dozen English cities, including Manchester.

Alongside the strategic partnership with Marconi, Atlantic also announced a pounds 94m share placing at 440p a share. The proceeds, together with the pounds 100m of support from Marconi, will be used to build out Atlantic Telecom's local network in Manchester, install a city centre fibre optic network in five cities and grow its high-speed data and broadband services such as Internet and e-commerce applications.

Graham Duncan, executive chairman of Atlantic Telecom, said that although Marconi would receive shares worth pounds 172m at the offer price for a cash outlay of just pounds 50m, the benefits of the deal, including access to Marconi's fibre optic network, were worth pounds 222m.

Mr Duncan also said that with Marconi behind it, Atlantic would find it much easier to tap the debt and bond markets when it needed further funding for its network roll-out. Building out the six networks in England it has licences for is likely to cost around pounds 300m.

Under the agreement, Marconi is prevented from buying more shares or selling its stake until December 2003. It also gives Marconi the right to a seat on the board, although it has not yet nominated a candidate.

News
people
Sport
FootballGerman sparks three goals in four minutes at favourite No 10 role
News
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
Sport
A long jumper competes in the 80-to-84-year-old age division at the 2007 World Masters Championships
athletics
PROMOTED VIDEO
Sport
Radamel Falcao was forced to withdraw from the World Cup after undergoing surgery
premier leagueExclusive: Reds have agreement with Monaco
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Sport
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
music
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
New Articles
i100... she's just started school
News
news
News
ebooksAn unforgettable anthology of contemporary reportage
New Articles
i100
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
New Articles
i100... despite rising prices
Voices
Holly's review of Peterborough's Pizza Express quickly went viral on social media
voices
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam