UK – There will be no changes to the roughly £2.7bn (€3.9bn) former Marconi pension fund amid a sale to Fortress Investment Group.
Network maintenance firm Telent is the remaining business arm of Marconi, which was renamed following the sale of the bulk of Marconi to Ericsson in 2005 for roughly £1.3bn.
It’s being sold to Fortress’s Holmar Holdings and press reports had likened the deal to a pension buyout.
A spokesperson for Fortress told IPE: “The potential offer for Telent is a private equity deal, and it’s very much about the ongoing business, not about the pension fund.
“We are satisfied that the pension fund is well-funded on an IAS19 basis, and therefore should the transaction go ahead the management team will be free to concentrate on developing and growing the business.”
In May, the boards of Holmar and Telent announced they had reached an “agreement in principle” regarding a possible cash acquisition.
Telent has been reviewing its structure since the disposal of its equipment and international services businesses to Ericsson. It initially sought to offload just its pension fund to a third party as part of that review.
“From these discussions, the board of Telent has concluded that there is no short or medium term prospect of Telent being able to dispose of the UK pension plan to the secondary market on terms that would create value for Telent shareholders,” said a release.
Following discussions with third parties, Telent concluded that a potential acquisition of the business was the most compelling option for its shareholders.
Holmar is expected to finalise its offer after July once discussions with “significant” Telent customers about the proposed change in ownership have been concluded.
The Pensions Regulator has given clearance to the possible offer by Holmar.
According to Telent: “With regard to the Fortress possible offer, the company has had considerable and extended dialogue with The Pensions Regulator, and they have given clearance to the proposed offer.
“The position of the fund would be as good after this proposed offer as it is now and because Fortress would be looking to grow Telent.”
Fortress Investment Group has roughly €16.4bn in equity capital under management.