CityFibre has agreed to an £537 million all-cash takeover offer from a US infrastructure investment consortium, backed by some of Wall Street’s heaviest hitters. It turns out loud, attention-seeking behaviour sometimes works.

The investment consortium, Bidco, backed by the likes of Rothschild and Goldman Sachs, has pitched the offer as a 93% premium on the closing share price on April 23, another example of the growing popularity of ‘altnets’ in the UK who are enhancing connectivity in areas neglected by Openreach. Yesterday saw Community Fibre, a London-based full-fibre ISP, receive £18 million from the National Digital Infrastructure Fund (NDIF) as the ecosystem seemingly tries to reduce reliance on the BT-owned wholesaler.

“CityFibre has established itself as a leading independent provider of wholesale fibre infrastructure in the UK and has been on a transformational journey since its IPO in 2014,” said Chris Stone, Chairman of CityFibre. “Your board believes that this transaction represents compelling value for CityFibre’s existing shareholders and is also a good solution for CityFibre’s long-term funding.

“Under private ownership, CityFibre will be able to gain alternative and potentially easier access to the financing required for its announced FTTH deployment. This will strengthen the Company’s ability to deliver on its vision to provide full fibre infrastructure to 20% of the UK market.”

The investment consortium is jointly owned by Goldman Sachs’ West Street Infrastructure Partners and private equity firm Antin, bringing together a range of investment partners including Greenhill, Rothschild, Finncap and Liberum. Antin, an infrastructure specialist investment fund, has a history of investing in the telecom sector with investments in Dutch and Belgian fibre-network owner EuroFibre, as well as a now-realised investment in Spanish broadcasting and telecommunications firm Axión.

CityFibre was founded in 2011, positioning itself as an alternative provider of connectivity in comparison to the stodgy incumbents. Initially the focus was on developing a full-fibre network in York, but acquisitions and ambitions took the firm to other under-served cities across the UK. While it is a firm which is primarily known for complaining, in the background it has been very effectively building out fibre networks in some of the UK’s areas of poorer connectivity. The firm currently has fibre assets, of varied size, in roughly 40 cities and towns around the UK which has led to what is looking like a very useful partnership with Vodafone.

The partnership with Vodafone has seen the pair announce three gigacities with plans for nine more in the pipeline. The proposition here is simple; CityFibre and Vodafone will link every home in the selected cities with full-fibre connectivity, irrelevant of demand or pre-orders, offering an alternative to Openreach. Thus far Milton Keynes, Peterborough and Aberdeen have gotten the fibre treatment, though future plans are being kept secret. All of these cities have poor download speeds, a CityFibre presence and a strong presence in the digital community, so it isn’t incredibly difficult to figure out where will be next; here is our attempt at guessing.

The underlying tone of frustration with Openreach has been building for years. Complaints about preferential treatment and under-investment led to the split of Openreach from BT, though it still remains a wholly-owned entity, and Ofcom rules to open up the poles and ducts for competitor ISPs, as well as the increasing popularity of alternative connectivity providers. Wall Street investors are pretty smart individuals so it shouldn’t be surprising they recognised an opportunity in CityFibre.