Gamma Communications Postpones Investor Vote on £1 Billion Takeover
The UK-based telecoms firm delayed a shareholder meeting for a second time, citing low initial participation in the vote on the Epiris private equity bid.
Gamma Communications has delayed a critical investor vote on a £1 billion takeover bid that would lead to the company's delisting from the FTSE 250. The British telecoms firm, which offers phone, messaging, and video conferencing services to businesses, confirmed it had agreed to the £1.02 billion offer from British private equity group Epiris.
The shareholder meeting has been rescheduled for November 2 after fewer than 40 percent of eligible votes were cast, falling short of the required threshold. Gamma's board stated that the low participation rate is largely due to a significant portion of economic interests, approximately 50 percent, being held by merger arbitrage funds that have recently acquired their positions.
"The board therefore believes that additional time should be allowed for the shares underlying those positions to be voted," the company said in a statement. Shares in Gamma saw a slight dip of 1.27 percent to 1,088p in early trading, following a nearly 20 percent increase earlier in the year amid deal speculation.
Gamma's board continues to unanimously recommend Epiris' offer of 1,120p per share. This represents a 53 percent premium to the company's share price before interest in a potential deal emerged months ago. The offer is not expected to increase unless a rival bidder emerges.
The company initially agreed to the takeover in August, shortly after confirming discussions with Dutch private equity group Waterland and fending off interest from other firms, including Providence Equity Partners and Oakley Capital. Gamma is urging investors to vote in favor of the private equity bid to ensure the court is satisfied with a fair and reasonable representation of shareholder opinion.
If the bid is approved, Gamma will join a growing list of London-listed companies exiting the stock market this year due to takeovers and significant defections. Industry observers have raised concerns about the rapid pace of merger and acquisition activity, valued at £74 billion this year, with many involving foreign buyers. Notable companies targeted include airline EasyJet, warehouse operator Segro, Lloyd's of London insurer Beazley, and financial institution Schroders. Additionally, Flutter, the owner of Paddy Power, has shifted its primary listing from London to New York.
These trends have led to calls for the Chancellor to consider eliminating stamp duty on share trading to enhance the competitiveness of the London market. Currently, investors pay a 0.5 percent tax on purchases of London-listed stocks, a levy not applied to overseas shares.