BT confirms cash offer for PlusNet
Thursday November 16, 2006 - 11:16 AMBT has announced that it has made a recommended cash offer for PlusNet.
BT has made a cash offer of 210p per share, valuing the company at approximately £67m. PlusNet had confirmed that a preliminary approach had been made back in October.
The bid, if successful, will add almost 200,000 further customers to BT’s broadband customer base. The directors of PlusNet have unanimously voted in favour of the offer. PlusNet will also retain its own brand identity.
On the announcement, BT Retail chief executive, Ian Livingston said: “This offer makes great sense for BT. We already provide the UK’s most popular and best-performing ADSL broadband service and this acquisition will ensure that even more people can enjoy our market-leading services. PlusNet’s customers and employees will benefit from the combination of PlusNet’s excellent platform and access to BT’s resources and technology development.”
Lee Strafford is also to remain CEO of PlusNet. On the announcement he commented: “I am pleased to announce BT’s offer this morning. Whilst the PlusNet Directors continue to believe that PlusNet is a high quality business, our sector is consolidating and there are considerable benefits to PlusNet in becoming part of BT. BT recognises the importance of retaining PlusNet’s identity and culture and I believe this will give rise to exciting opportunities for PlusNet, our customers and our employees.”
The offer for PlusNet comes as no surprise as broadband providers consolidate to maintain market share in the highly competitive broadband market. Recently, Carphone Warehouse also bought out AOL’s UK broadband operation. Other providers involved in buyouts include Biscit and Pipex, who themselves have also been under speculation as a possible target for one of the bigger players.
The move should also reassure investors who had been worried about BT’s market share being eroded.
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