Dutch private equity firm Waterland has confirmed it is no longer working with UK telecom services provider Giacom on a possible joint bid for Gamma Communications. The announcement comes as Gamma weighs a 1,120 pence-per-share takeover proposal from rival buyout firm Epiris, a deal that would value the London-listed company at roughly £1.08 billion.
Gamma, which provides cloud-based communications and business phone systems to small and medium-sized enterprises, has been the subject of takeover interest for months. Earlier this month, the company agreed to Epiris’s cash offer, but the deal is not yet final. In August, Gamma revealed that Giacom—a firm that supplies IT and communications services to resellers—was working with Waterland on an alternative structure. Under that plan, Giacom would have acquired certain Gamma business units, while Waterland would have taken a stake in the rest.
Now Waterland says it is no longer “acting in concert” with Giacom, meaning the two are not coordinating their efforts. The move effectively removes one of the main rival bids, leaving Epiris as the front-runner. Giacom has not publicly commented on whether it will pursue a solo offer.
Why this matters for Gamma shareholders
For investors in Gamma, the key question is whether the Epiris offer will go through and at what price. The 1,120 pence per share proposal represents a significant premium to where the stock traded before takeover interest emerged. However, the deal is still subject to shareholder approval and regulatory clearances, and there is always the chance that another bidder could emerge or that the terms could change.
Waterland’s exit reduces the likelihood of a bidding war, which could have pushed the price higher. But it also removes uncertainty about a complex alternative structure that might have been harder to execute. Investors will now focus on whether Epiris can complete the acquisition and whether any other parties step in.
What is Gamma Communications?
Gamma is a UK-based provider of communication services, including voice, video, and messaging solutions, delivered over the internet. It serves businesses of all sizes, from small offices to large enterprises, and has grown steadily by acquiring smaller rivals and expanding its product range. The company is listed on the London Stock Exchange and is part of the FTSE 250 index.
Private equity interest in Gamma reflects a broader trend of buyout firms targeting UK tech and telecoms companies with strong cash flows and recurring revenue. Similar deals have been seen across the sector, as investors seek stable businesses with growth potential. The recent private equity buyout of Spire Healthcare is another example of this pattern.
What it means for everyday investors
If you own Gamma shares, the news is a reminder that takeover situations can change quickly. While the Epiris offer looks attractive, it is not guaranteed to complete. Shareholders should watch for updates on the offer document, shareholder meetings, and any regulatory hurdles. If the deal falls through, the share price could drop back to pre-bid levels.
For investors in other UK small-cap and mid-cap stocks, the episode highlights the potential for private equity to drive share prices higher. But it also underscores the risks: deals can collapse, and the process can take months. As always, diversification and a long-term perspective are key.
Waterland’s decision to step back is not entirely surprising. The firm had been exploring a joint approach with Giacom, but such structures are often complex and can be difficult to finance. With Epiris already having a firm offer on the table, Waterland may have concluded that a rival bid was not worth the effort. The news also comes amid a broader wave of private equity activity in Europe, with firms raising large funds and seeking deals. However, higher interest rates have made financing more expensive, which could slow the pace of buyouts.
For now, Gamma’s board is recommending the Epiris offer, and shareholders are expected to vote on it in the coming months. If approved, the deal would mark the end of Gamma’s time as a public company. If not, the company will continue to operate independently, and investors will look to its next set of results for signs of growth.
In the meantime, the market will be watching whether any other bidders emerge. The recent volatility in global markets could make financing a deal more challenging, but for a company of Gamma’s size, interest from private equity is likely to remain. The outcome will be a test of whether the current wave of UK takeovers continues or begins to cool.
