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Virgin Media O2 and its shareholders are exploring a takeover bid for Trooli, one of the UK’s army of ‘altnet’ fibre broadband companies.

Sky News has learnt that the telecoms giant, which is jointly owned by Liberty Global and Spain’s Telefonica, is among a substantial number of parties examining offers for Trooli as part of a formal auction process.

Telecoms industry sources said any offer was likely to be worth in excess of £100m.

Trooli is exploring a sale amid growing pressure on the deluge of alternative network – or altnet – providers which have sprung up in the last decade as part of efforts to transform Britain’s communications infrastructure.

The market is dominated by BT’s Openreach division, but also includes large competitors such as CityFibre Holdings.

Trooli is focused on rural and semi-rural postcodes, and has been connecting households to fibre broadband in counties including Berkshire, Dorset and Kent.

It has previously set a target of one million premises by the end of next year, although it is unclear whether that ambition remains realistic.

Many of the smaller altnets have been hit by soaring costs and supply chain and labour issues, impairing their path to profitability.

Trooli raised nearly £70m of senior debt in August 2021 to help it expand.

Its shareholders are understood to largely comprise its management team.

Virgin Media O2’s interest in acquiring Trooli has been registered as part of the sale process being handled by bankers at Lazard.

It remains possible, however, that an acquisition of the business could be undertaken through the behemoth’s shareholders’ joint venture, Nexfibre, according to one insider.

Nexfibre is also partly owned by Infravia, an infrastructure investor.

A Virgin Media O2 spokesman declined to comment on Monday.

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Thames Water bondholders submit rival £3bn financing offer

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Thames Water bondholders submit rival £3bn financing offer

The battle for control of Thames Water’s future has deepened after a second group of bondholders tabled a fully underwritten offer to provide £3bn of new debt.

Sky News has learnt that the utility’s class B bondholders submitted a proposal to the company on Thursday morning which aims to trump a rival offer from its class A creditors.

The submission of the class B group’s legally binding agreement sets up a tussle between some of the world’s largest pension funds, hedge funds and insurers for a key role in determining the fate of Britain’s biggest water company.

Thames Water, which has about 16 million customers, is scrambling to avert the threat of insolvency and temporary nationalisation as it seeks a compromise from Ofwat, the industry regulator, over its spending plans for the next five years.

The company’s shareholders have already abandoned plans to inject billions of pounds into it, describing it as uninvestible.

The tabling of the latest proposal will put pressure on Thames to reconsider its public support for a more expensive deal with the class A group, which includes the likes of Silverpoint and Elliott Advisors, the American hedge funds.

One of the members of the class B group said its plan provided Thames Water with “a deliverable and binding offer to address the company’s immediate funding needs”.

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Amid a dispute with the class A debtholders about the relative cost to Thames Water of their proposals, the source said the class B financing would provide “twice the capital at a far lower cost and on more flexible terms”.

They added that it was open to all Class A and Class B holders.

It was unclear whether Thames Water would be able to engage on the class B proposal under the terms of the deal the company has already endorsed with the class A group.

The class B plan has been assembled and financed in less than a fortnight by DC Advisory, the investment bank, and law firms Quinn Emmanuel Urquhart & Sullivan and Sidley Austin.

The Class B debtholders have calculated that Thames Water could save approximately hundreds of millions of pounds in interest payments and fees over a 12-month period if the company switches its backing to their proposal.

Alastair Cochran, Thames Water’s chief financial officer, said last month that the Class B group’s proposals, which include funding lent at an interest rate of 8%, were insufficiently detailed to garner the board’s support.

A separate equity-raising process is being run by bankers at Rothschild, with Sky News revealing last weekend that KKR, the American private equity behemoth, is the latest party to express an interest in a deal.

Any substantial pay packages for Thames Water executives – particularly at one standing on the brink of collapse – arising from the deal would be highly contentious, with the government recently having established an independent review of the industry that will look at far-reaching reforms.

A significant incentive plan would also be controversial given that Thames Water will require forbearance from Ofwat, the industry regulator, in terms of substantial fines and other penalties it is likely to have to pay because of its dire record on sewage leaks and wastage.

A spokesman for the class B group, whose members include BlackRock, the world’s biggest asset manager, declined to comment.

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Higher employers’ national insurance contributions to cost Sainsbury’s £140m and cause inflation to rise – CEO Simon Roberts says

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Higher employers' national insurance contributions to cost Sainsbury's £140m and cause inflation to rise - CEO Simon Roberts says

Measures announced in the budget will cost one of the UK’s biggest supermarket chains £140m, its chief executive said.

The rise in employer’s national insurance contributions, announced by Chancellor Rachel Reeves in her budget last week, will cost Sainsbury’s £140m from April, CEO Simon Roberts said.

No price was put on the rise of the national minimum wage but Mr Roberts said the new measures would cause inflation – the rate of overall price rises – to go up.

The supermarket chain, the UK’s second-largest by market share, does not have the “capacity to absorb” a “barrage of costs”, Mr Roberts said so customers will have to pay more.

Money blog: House prices hit record high

He pointed to analysis from independent forecaster the Office for Budget Responsibility (OBR) which said Ms Reeves’s announcements would cause inflation to be higher than originally predicted, saying it was “difficult to disagree with”.

Mr Roberts said: “This impact on national insurance was unexpected and is coming in fast, it will have a very significant impact, it will impact our costs base… and our suppliers’ cost base.”

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When asked to quantify the inflationary effect of minimum wage rises and upped national insurance contributions Mr Roberts said inflation was already on the up, there’s “a lot of pressure in the pipeline….there’s pressure in the system in inflation already”.

Read more:
Retail giants face food price hikes dilemma after budget

What had been expected, Mr Roberts said, was a reduction in business rates: “Business rates will go up this year I certainly didn’t expect them to go up next year I expected them to go down”.

What does it mean for staff?

When asked what the impact could be on the Sainsbury’s workforce Mr Roberts said the company had “difficult decisions to take as a result” but it was “too early to be specific”.

Earlier this week JD Wetherspoon, which owns more than 1,000 pubs across the UK, said the budget will add £60m in costs next year, while M&S expects to take a £120m hit.

Changing habits

Also announced by Sainsbury’s on Thursday morning was the return of the “big weekly shop” as people are going back to the office.

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As a result of higher restaurant prices people are also eating at home more, Mr Roberts added.

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Cambridge semiconductor company at Forefront of investors’ thoughts

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Cambridge semiconductor company at Forefront of investors’ thoughts

A Cambridge semiconductor company has defied the tough funding environment for early-stage businesses by securing £16m to fuel its expansion.

Sky News understands that Forefront RF, which was set up in 2020, will announce this week that it has raised the money from new venture capital backers Octopus Ventures and Cambridge Innovation Capital, as well as existing investors BGF and Foresight Group.

Forefront RF is a fabless semiconductor company which makes multi-band smartphones, wearable and Internet of Things-connected devics simpler to design.

Its technology aims to solve some of the challenges presented by printed circuit board (PCB) size limitations, enabling mobile devices to manage complex radio frequency environments.

The Series A fundraising takes the total sum raised by Forefront RF to nearly £25m.

The company employs 17 people, and intends to use the new capital to support a major product launch in 2026.

Ronald Wilting, Forefront RF chief executive, said its innovation would “help device manufacturers create smaller, more powerful wearables that support a wider range of communication bands”.

Mr Wilting, a former executive at Ericsson and Qualcomm, joined the company in 2022.

“[Forefront RF’s] patented technology will revolutionise how mobile devices are designed, reducing complexity, and streamlining supply chains,” said Owen Metters, investor at Octopus Ventures.

“The continuing proliferation of cellular-enabled devices means there is a significant opportunity for technology such as [the company’s flagship product] ForetuneTM.”

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