Gamma Communications (GAMA), a telecoms company listed in the UK, is currently in a formal offer period, with two interested potential bidders having been named. In this article, I cover:
Potential bidders
Estimate bid likelihood and timings
Likely share prices for a takeover / no takeover
Appraisal and summary
Gamma Communications was a stock pick for Real Worth Stocks subscribers at £10.00 in October 2025, and I purchased additional stock for the portfolio in March-May 2026 at prices from £7 to £9.50.
Potential bidders for Gamma Communications (GAMA)
There are currently two named interested parties in discussions with Gamma about a takeover:
Epiris LLP (private equity): a UK mid market PE firm focussing on buying out firms, doing financial engineering and then exiting for a profit: they are a financial buyer.
Giacom and Waterland consortium
Giacom is a private equity backed company, chaired by serial telecoms entrepreneur Matthew Riley. Waterland are a European private equity company, who would buy Gamma, and then sell part of it to Giacom.
Epiris say that they typically buy cash generative companies with an EV in the range £75-£750M, so Gamma would be at the top end of their usual range. They aim to improve the companies operations using their strategic knowledge, perhaps buying other companies to bolt on to Gamma, or restructuring it, and then will realise value through a sale/flotation.
Giacom had tried to partner with Oakley Capital before, another European private equity firm - which Matthew Riley had links with, but that did not work out, and Oakley pulled out on 12th June 2026. Since Giacom are back with another partner, that indicates their interest and this triggered a run-up in the share price from £9.67 on 20th August before the announcement of their interest, to £11.56 as of end of August 2026. Giacom are interested in parts of Gamma, probably the UK SME and channel customers, with Waterland taking the rest.
Providence Equity Partners: a large US media/telecom focussed PE fund were named in the press as a Gamma offeror, and Gamma then named them in an official news release, but Providence then ruled themselves out on 24th June 2026.
Estimated bid for GAMA: likelihood and timings:
Bid likelihood:
It is highly likely that one or both interested parties will make a bid. Epiris has been in negotiations since at least mid May - so 3.5 months, and Giacom and Waterland probably at some point since the Giacom and Oakley Capital consortium fell through: 1-2 months. I would estimate the probability of a bid at about 80% or so. Gamma is a large UK telecoms company with a significant position in the growing German market, and at the current share price of £11.57 has a market cap of £1.07B, and is priced at 16x 2025 earnings which were depressed due to one-off acquisition costs from the STARFACE acquisition. Clearly the market expects a bid to come in above this level, perhaps because Giacom is a strategic buyer.
Bid Timing
Current deadlines
In the UK, according to LSE rules, when a potential bidder is identified they must be named with an official news release; and they are then given 28 days to either make an offer or walk away: a PUSU deadline (put up or shut up). If they walk away, then they cannot make another offer for six months.
The PUSU deadline can be extended, and has been multiple times for Epiris. Current PUSU deadlines are:
Epiris: 2nd September 2026
Giacom and Waterland: 18th September 2026
There may also be other, as yet unnamed bidders that the Gamma board is in discussions with. This is because once a bidder has been identified in the press, then Gamma is required to make a regulatory announcement, but if they are not identified, then they can continue to negotiate with the board in secret.
I would expect that Epiris will either walk away or announce a bid in the next month, possibly two. They will also be motivated to accelerate the process now that there is another named potential party in the frame. Giacom and Waterland may not have had enough time to prepare for a bid by the 18th September deadline, so I would expect them to ask for one extension at least. However, Giacom have been looking at Gamma for quite a while with Oakley Capital, so most of the work for a Giacom/Waterland bid would likely need to be done by Waterland to determine what parts of Gamma they would retain and the division of the acquisition cost between them and Giacom.
Likely Valuations if Takeover / No Takeover
Gamma was valued more highly in 2024 at a peak of £17.34, but the share price dropped steadily since then, with a trough about £7 in April 2026 as below.
At that point, the board announced multiple potential offerors: and the share price picked up to about £8-£10. It then fell away to about £8.50 when the Oakley/Giacom consortium fell apart in mid-June, and then when the Waterland/Giacom consortium was announced on 20th August 2026, spiked up to the current level of £11.57.
However, at this level it is still significantly below where it has traded in 2024.
Valuation if a bid:
The market is clearly expecting Gamma to be sold for more than £11.60.
If we assume free cash flow of about £80M in 2026, then the P:FCF at a £12 share price is P:FCF = 13.5x, at £13 share price: P:FCF = 14.5x, £14 share price, P:FCF is 15.5x.
I would think that the PE firm might be willing to pay £14, which is 15.5x FCF. 2026 EBITDA is forecast at £140M, so this would a valuation of 9x EV:EBITDA.
I think that £14 is realistic, because the Gamma revenues are growing each year, and because of the quality of the revenues, as 90% are recurring revenues, which PE firms like because they can support acquisition debt repayments. If the Giacom and Waterland bid succeeds, the sum of the parts that they would split Gamma into could be £14 or potentially more, since Gamma’s UK SME/channel business is a good strategic fit with Giacom’s existing businesses. Therefore, I would estimate a takeover bid of about £14, with an 80% probability of a bid, due to the presence of multiple named parties negotiating with the board.
Valuation if no bid
I think that it would be highly unlikely for Gamma to fall back all the way to £7: I would expect about £9-£10 if there is no bid. At £9 it would be valued at just £800M, 10x forecast 2026 free cash flow, which is very low for a company with 25% return on equity and single digit growth, with about 90% recurring revenues.
Probability-weighed value
If we assume an 80% probability of £14 in a bid situation, and a 20% probability of a £9.50 share price in a no-bid situation, the expected value of Gamma stock is:
=80%*£14 + 20%*£9.50 = £13.10
This gives a £13.10-£11.60=£1.50 or 13% upside from today’s price. If the bid actually goes through at £14, it would be a 21% return.
Appraisal and Summary
I have appraised potential valuations for Gamma of £14 for a takeover, and £9.50 if no takeover, which gives a potential 20% upside if the takeover goes through, and 18% if it does not - but the takeover is significantly more likely than a no deal.
Furthermore, the takeover is likely to happen in the next 2-3 months if it happens at all - therefore I continue to hold my Gamma position because of the high expected annualised rate of return. Gamma has consistently grown it’s sales over the last few years, but the market has lost confidence due to slowing revenue growth: but I think that it has over-reacted and that a sale is now very likely.
Disclosure:
Real Worth Stocks currently holds a long position in Gamma Communications at the time of writing. This is not financial advice: and while every effort has been made to check the information presented, no warranty is given as to the accuracy or suitability for any purpose of the information in this article.