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Shareholders Nix Telent Deal

The £346 million ($660 million) purchase of telent plc (London: TLNT), the former telecom services of Marconi, by private equity firm Holmar is off following a shareholder revolt against the deal.

At an Extraordinary General Meeting in London last Friday, a group of shareholders led by the largest single stakeholder -- hedge fund Polygon -- which controls nearly 24 percent of the company's equity, voted against the sale. The deal, first announced on May 25, needed 75 percent shareholder approval but failed to muster even 60 percent. (See Firm Nabs Marconi's Telent.)

Referring to the proposed acquisition as 'the Scheme,' Telent released a statement to the London Stock Exchange saying that "the Board believed the Scheme offered attractive value to shareholders and, therefore, regrets this result."

The offer from Holmar was for 529.5 pence per share. Telent's share price is down 5 pence, more than 1 percent, to 485 pence. Weekend media reports suggest Polygon is convinced Telent is worth more than Holmar was offering in the long term.

Telent is the telecom services and support business that Ericsson AB (Nasdaq: ERIC) opted not to acquire when it snapped up the telecom infrastructure business of Marconi in October last year. (See Ericsson Buys Bulk of Marconi and Ericsson/Marconi: The Fallout.)

Telent, which boasts BT Group plc (NYSE: BT; London: BTA), Cable and Wireless plc (NYSE: CWP), ntl group ltd. (Nasdaq: NTLI), and Ericsson among its main customers, recorded a profit for its fiscal year ending March 31 2006. (See Telent Reports Full Year.)

— Ray Le Maistre, International News Editor, Light Reading

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