The offer from Macquarie-backed MEIF 6 Fibre Limited is worth 108p per share for KCom, 11p higher than the one submitted by Humber Bidco, which is owned by British pension fund Universities Superannuation Scheme.
The MEIF deal is worth £563m whilst the Humber Bidco deal is worth £504m.
MEIF’s offer represents a 49 per cent premium to KCom’s closing price on April 23, the day before Humber Bidco announced its offer for the firm.
Macquarie funds have been investors in critical telecom infrastructure since the early 2000s, including investments in European players Arqiva, Poland-based INEA and Denmark’s TDC.
If successful, MEIF is expected to hold the investment for 10 to 15 years and is keen to expand KCom's reach beyond the current 140,000 consumers and businesses in the Hull and East Yorkshire region.
It is keen to work with the existing management KCom management team as expansion gets underway.
KCom issued a profit warning last year, which was followed by a number of management changes including the departure of its chief executive officer and finance chief.
Former BT executive Graham Sutherland was appointed as chief executive in October and he announced a review of KCom’s business strategy a month later.
Patrick De Smedt, interim chairman of KCom, said: “The board of KCom is pleased to recommend MEIF 6 Fibre’s cash offer.
"This offer provides our shareholders with even greater value in cash for their shares, as well as providing KCom with a strong partner as we work to maintain, build and enhance our offering and position.”
Leigh Harrison, head of Macquarie Infrastructure and Real Assets EMEA, said: “We are pleased that the KCom board is recommending our takeover offer.
"KCom has a strong local heritage that has been developed over more than a century and is well-positioned to continue to meet the evolving telecommunications needs of the region, which is why we have made this compelling offer to shareholders at an attractive premium.
“As an experienced, long-term telecommunications investor, we are committed to supporting KCom’s sustainable growth. We look forward to partnering with management to increase broadband take-up in its core region and beyond, enhancing the quality of service delivery while giving local businesses and residents greater access to the opportunities that high-speed broadband can provide.”