isp sector is under the acquisition radar

Friday, October 13, 2006

U.K's PlusNet On The Block; Is BT Bidding?

BT today was named in the U.K. press as the company making a play for Yorkshire-based national broadband provider PlusNet.

In a London Stock Exchange filing late yesterday, PlusNet confirmed receiving a bid approach, but it did not say from whom. Half of the pundits in the U.K. agree BT's name is firmly in the picture, while the other half named Germany's Freenet.de. The company was formed in 1997 and went public in 2004.

The PlusNet filing didn't specify a price, but analysts quickly named $111.34 million. TelecomWeb news break could not confirm if that number is accurate but, in any event, PlusNet shares immediately took off on the speculation, gaining nearly 15 percent.

While not one of the biggest players in the market, PlusNet has seen rapid growth of its broadband customer base recently, almost tripling its subscriber total during the last two years. At the end of June, the ISP served nearly 200,000 broadband users, up from 113,000 a year earlier. The operator also has seen a healthy increase in profits. For the six months to the end of June, it had profits of $5.62 million, and its revenues for the first six months of this year were close to $41.8 million.

In one of its recent marketing campaigns, PlusNet offered customers a communications package combining broadband at 8 Mb/s, landline rental and inclusive calls for $38.97 per month.