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* Fidelity offers 190 p/shr
* Offer undervalues co - independent directors
* Stock jumps as much as 23 pct to 192.91 p (Adds analyst comment, no comments from shareholders, detail;updates share movement)
By Esha Vaish
June 19 (Reuters) - Colt Group SA's largestshareholder, asset manager Fidelity, offered to take it privatein a deal valuing the telecommunication service provider atabout 1.72 billion pounds ($2.73 billion).
The 190 pence per share cash offer undervalued Colt, saidthe company's independent directors on Friday. The offerrepresented a 21.3 percent premium to the stock's Thursdayclose.
Shares in Colt, which runs fibre optic networks and datacentres for companies, jumped as much as 23 percent to 192.91pence on Friday morning, above Fidelity's offer. But they werelater trading at 190 pence.
A third party could potentially pay much more for Colt, theindependent directors said. But a deal would not go throughunless Fidelity changes its plan to hold on to its stake throughnext year.
Fidelity, one of the founding investors of Colt, said itwould not increase its offer. The firm held 62.4 percent ofColt.
The offer has been accepted by Standard Life Investments andRuffer LLP, who together held about 7.8 percent of Colt,Fidelity said.
"We have accepted Fidelity's ... offer as being the bestavailable option in the circumstances," a spokeswoman forStandard Life Investments said.
Other top shareholders where either unavailable to commentor declined comment.
"I would consider (the offer) redemption for long sufferingColt shareholders." Andrew Darley of brokerage finnCap toldReuters.
Colt shares, Friday's top percentage gainer on London'sFTSE-250 Midcap index, have fallen about 11 percent sincelisting in 2006. Reduction in call rates have hit the company'svoice services business, which bring in nearly a third of itsrevenue.
On its own, Colt will find it difficult to generate"meaningful cash flow" due to inferior economies of scalecompared with competitors, J.P Morgan Cazenove analysts had saidin February when the company announced results.
The firm is advising Fidelity while Colt is being advised by Barclays Bank.
M&A in the telecommunication market has been heating upsince Britain's BT Group Plc agreed to buy EE, thecountry's biggest mobile operator, from Orange andDeutsche Telekom earlier this year.
Telecoms markets in France, Italy and the UK are ripe forfurther consolidation. In UK, converged products were in shortsupply, said analysts at EY. (http://bit.ly/1N8ODNo)
Ownership of networks was back in fashion, Darley said.
Colt's independent directors made no recommendation toshareholders. ($1 = 0.6306 pounds) (Additional reporting by Simon Jessop in London; Editing byAnupama Dwivedi and Joyjeet Das)
