Telecoms firm KeyTech has launched a bid to take full control of TV provider CableVision.

KeyTech subsidiary Wansunt, the majority shareholder in CableVision, is bidding for 100 per cent ownership of its shares with an offer of $13 per share to minority holders.

The proposed deal envisions a merger with Connect Ltd, wholly owned by Wansunt which was made up of telecoms players North Rock and Logic, also controlled by KeyTech.

A letter to Cablevision shareholders backed the takeover proposal.

It said that the CableVision board had considered its position as a stand-alone company and consolidations in its telecoms industry rivals on the Island like Digicel.

The letter added: “We have also considered the fact that, due to the level of capital expenditure required to fund the company’s planned network expansions and improvements, the company is unlikely to be able to declare and pay dividends for a number of years without capital injections from its shareholders.

“Further, there is no guarantee that, even with high levels of capital investment in the company’s infrastructure, the company will continue to succeed and operate with a profit in such a challenged market.

“After due consideration of the merger and the resulting benefits to the company in terms of access to telecommunications assets, expertise and capital that might not otherwise be available to the company, we have determined that the merger is in the best interests of the company and its future survival and growth.”

But one small shareholder said the offer undervalued CableVision shares — which she estimated were worth between $25 and $40 apiece.

The shareholder said: “KeyTech wants all of the smaller shareholders out.”

Now shareholders will be asked to vote on the proposal at a special general meeting to be held at the Bermuda Underwater Exploration Institute next Wednesday.

The letter told shareholders that the CableVision board had rejected an earlier $12-a-share bid by Wansunt.

And it told small shareholders that if they were not satisfied with the offer, they had a month to apply for a court ruling to set a price for their shares.

Wansunt, Connect and CableVision all share the same registered office address, 30 Victoria Street in Hamilton.

CableVision declined to discuss the proposal.

CEO Terry Roberson said: “I am unable to discuss any specifics regarding the items that will be voted upon at the SGM on July 15.”

But the proposed merger agreement said that Connect shares are all registered in the Wansunt name.

Wansunt already owns more than 80 per cent of CableVision shares, with the rest in the hands of a group of minority shareholders.

Corporate services firm Quorum in March this year wrote to minority shareholders on behalf of an undisclosed client offering $6 per share.