BT made a cash offer of 210 pence ($3.96) per share, valuing PlusNet at approximately 67m pounds ($126.6m). PlusNet’s directors have unanimously recommended the offer and have given irrevocable undertakings to accept the deal.
PlusNet was established in 1997 and was floated on the alternative investment market of the London Stock Exchange in July 2004. In its last fiscal year ending June 30, 2006, the company posted net income of 3.9m pounds ($7.4m) on sales of 41m pounds ($77.4m).
Its shares closed trading at 206 pence ($3.89) on Wednesday before the offer was announced on Thursday morning.
Shares in the ISP had risen dramatically back in October, after PlusNet confirmed that it had received a preliminary takeover approach. Unconfirmed reports at that time suggested that BT was the bidder.
PlusNet is well regarded by customers in the UK and the ISP regularly comes first in customer-satisfaction surveys. It now has a customer base of nearly 200,000.
BT said the ISP will continue to operate from its Sheffield headquarters under the leadership of existing CEO Lee Strafford.
Our plan for the moment is for PlusNet to keep its brand, staff, CEO, and maintain the operation as a separate identity, a BT spokesperson told ComputerWire. He confirmed there were no job cuts planned.
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, said CEO Strafford. With over 200 ISPs in the UK, consolidation is inevitable, and the deal should provide PlusNet with the kind of financial stability that ownership by a large conglomerate offers.
However, while BT will welcome the addition of PlusNet’s 200,000 broadband customers to solidify its second place in the UK market-place, there is another reason why PlusNet proved to be so attractive. The real jewel in PlusNet’s crown is its internet traffic management system known as Workplace. The system is well regarded within the industry, and it is well known that BT has used Workplace to supply remote broadband access to its major corporate customers for several years now.
