News

Caudwell confounds mobile critics, raising £1.46 billion for Phones4U

Equity capital has hit the jackpot, managing to raise an extra four hundred million pounds above the highest previous estimate of what Phones4U would be sold for, and making the already wealthy John Caudwell amazingly rich. Students of the UK mobile market will be truly flabbergasted.

Caudwell has 85% of the shares in the company, meaning he will get £1.24 bn personally. "It's a fair price, but it's not a great price. The business has such a lot of further potential going forward and there is no doubt that the buyers will make a very substantial profit," Caudwell told the BBC.

That's not entirely true: most commentators will doubt this very much. But most commentators have been wrong on this one.As recently as Friday, the Independent's Nic Fildes was predicting £1.1 bn, which many saw as implausibly high. As the weekend ground on, the rumours hardened, and the amount went up in jumps of £100m at a time.

There will be those who are horrified. One analyst told NewsWireless that the sale showed "the retail business is completely out of control of the networks."

The news broke in starkly factual Reuters phraseology: "The privately-held company said in a statement that under the deal's terms, Doughty Hanson retains the 20:20 Logistics Distribution Group, to be renamed the 20-20 Mobile Group, while Providence gets to acquire the Phones4U arm."

By the time the Reuters release hit the wires, however, the sales price had hit the £1.5 bn mark - a price which was the final crescendo. Nobody predicted it would be this much. Tags: Phones4U, John Caudwell , mobile churn , equity capital