Marconi deal raises Atlantic's value by 70%
Saturday 13 November 1999
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.
- 1 The truth about 'girl things': Three cheers for Heather Watson's honesty
- 2 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 3 UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
- 5 Men behaving badly: Urinating while standing, 'manspreading' and the gendering of selfishness
Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign
Ellen DeGeneres leads Johnny Depp, Gwyneth Paltrow and Paul Bettany in revealing game of Never Have I Ever
Nigel Farage: NHS might have to be replaced by private health insurance
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
British Muslim school children suffering a backlash of abuse following Paris attacks
George Galloway condemns 'racist, Islamophobic, hypocritical rag' Charlie Hebdo at freedom of speech rally
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
iJobs Money & Business
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...
£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...
£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...