Kingston Communications - for sale for £400m?

Kingston Communications looks set to be the next telco to be bought.

According to reports, US private-equity firm Carlyle is prepared to bid more than £400m for it. The acquisition talks are thought to be at an early stage and Kingston Communications has yet to open its books to its would-be buyer, a source told Reuters.

Analysts believe Carlyle, which lists technology and business services as well telecommunications among its interests, could be after the company's solid revenues – the company notched up EBITDA profits of £62m for the year ending 31 March 2005 and £51m for the corresponding period in 2004.

In addition, Carlyle and Kingston have already had dealings, when Carlyle took Kingston's satellite unit off its hands in 2004.

Any acquisition will need the official approval of Hull City Council, which owns 31 per cent of the company.

A Kingston Communications buyout would represent the latest example of consolidation in the communications sector. The $6bn mega-merger of NTL and Telewest kicked off a feeding frenzy that has seen Sky snaffle Easynet, Pipex buy Freedom2Surf and Swisscom mull a takeover of Eircom.