Dutch private equity firm Waterland is reportedly preparing a higher offer for UK-listed telecommunications provider Gamma Communications, potentially setting up a bidding contest with rival sponsor Epiris, according to Private Equity Wire. Waterland is considering a proposal worth more than the £1.08bn bid agreed by Gamma with Epiris last week, according to the same report.
Epiris agreed to acquire Gamma for 1,120 pence per share, securing the company’s backing after what was described as a competitive process, according to Private Equity Wire. The report says Waterland’s renewed interest now threatens to reopen the transaction.
Epiris deal terms and timing
Gamma formally agreed to the Epiris transaction just days before the potential renewed bid, according to Private Equity Wire. The report states that shareholders could now face a choice between a straightforward take-private deal and a higher-value proposal involving a substantial restructuring of the group.
Waterland’s prior discussions with Gamma
Waterland had already held preliminary discussions with Gamma in August over a potential takeover, according to the report. Waterland is understood to have a different strategy for the business than Epiris, according to Private Equity Wire.
Proposed carve-out and Giacom role
Under Waterland’s proposed structure, Waterland would acquire Gamma and subsequently sell two divisions serving small and medium-sized enterprises to UK telecoms services provider Giacom, according to the report. The businesses targeted for disposal generated almost 30% of Gamma’s revenue last year, according to Private Equity Wire.
Gamma is understood to view the Epiris proposal as offering greater certainty and a lower risk of execution than Waterland’s more complex approach, according to the report. The report also states that, for Waterland, a successful bid would provide an opportunity to separate Gamma’s operations and potentially unlock value through the sale of the SME-focused businesses to an industry buyer.
Reporting attribution
The report cited by Private Equity Wire attributes the information to the Sunday Times, according to Private Equity Wire.
