Eversheds has been appointed to advise Kingston Upon Hull City Council on its controversial plans for a £500m flotation of Kingston Communications (Hull), the unique telecommunications service owned by the council.
Kingston Communications is the only UK telecommunications service in public hands and can trace its roots back to the first days of the telephone.
In the early, pre-nationalisation days at the turn of the century, local telephone networks were set up and owned by local authorities. When in 1911 the Liberal Government of Herbert Asquith nationalised the networks, Hull was the only council to be left alone.
As a result BT has not been allowed to operate in Hull, although industry regulator OFTEL is reviewing whether or not to allow the monopoly to continue.
Eversheds corporate finance partner Rob Pitcher said he expected that Kingston Communications' monopoly would now be broken.
After a year of record profits, the company is looking to finance expansion into areas such as business-to-business services and fibre optic cabling, but there are statutory limitations on the council's ability to provide finance for it.
As a result, the company and the council are conducting a review of available options. “But it is fair to say that there is likely to be a flotation,” Pitcher said.
However, the proposal for a flotation has not been without controversy.
Two months ago the council received an unsolicited bid from LandTel, a company set up by US investors specifically to make an offer for the company. LandTel offered £250m for a 49 per cent shareholding and full ownership of the company's highly profitable subsidiaries.
It then emerged that the council was considering passing to the police documents relating to LandTel's offer and its subsequent invitation to all councillors to dinner.
Eversheds' Pitcher attributed the firm's “great appointment” to the fact that Eversheds had both the largest public sector practice of any law firm in the UK and the largest telecoms team outside the City.
Ashurst Morris Crisp is advising Kingston Communications.