BT is to buy rival ISP PlusNet for 67m in the latest example of consolidation in the UK broadband and telecoms market.
The deal, based on a cash offer of 210p per share, will add 200,000 broadband subscribers to BT's own broadband customer base. The offer has been unanimously recommended by the PlusNet directors.
PlusNet revealed it was being wooed by a potential buyer more than a month ago, prompting its stock to surge some 30 per cent towards the 200p range. At the time of writing, the share price sat at 208.25p, just short of the BT offer price.
PlusNet's most recent fiscal year saw it turn a net profit of 3.9m on revenues of 41m. BT says PlusNet will retain its name identity, continue to operate out of Sheffield, and praised the company for its 'strong reputation for both customer service and innovation'.
Recent surveys of customer service levels from ISPs, however, showed PlusNet performed poorly, with satisfaction levels plummeting 10 per cent.
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."
BT currently has around a third of the UK's broadband market. PlusNet has just three per cent, with around a quarter of a million lines, according to ISPreview's for the first quarter of 2006.
Lee Strafford, the chief executive of PlusNet who will remain in that position after the takeover, said: "I am pleased to announce BT's offer this morning. While 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."
