TalkTalk To Go Private In $1.5B Takeover Deal

UK broadband provider TalkTalk has agreed to a £1.1 billion (about $1.5 billion) takeover by existing shareholder Toscafund and PE firm Penta.

The deal comes at a time when TalkTalk is reeling from the impact of the COVID-19 pandemic. Despite adding more than 187,000 net fiber customers this year, the company revealed a pre-tax loss of £4 million in the six months to Sept. 30, compared with a £1 million profit the year before. Revenue was down 6.6% to £740 million in the same period.

The 97-pence-per-share offer represents a 16.4% premium over the company’s closing price on Oct. 7, the day before the bid was made public. Toscafund, which holds a 30% stake, reportedly approached TalkTalk last year with a 135-pence-per- share offer, which the group rejected on the basis that it was too low.

TalkTalk, which spun out from Carphone Warehouse in 2009, is the UK’s fourth-largest broadband provider with 4.2 million customers, competing with BTSky and Virgin Media. In May, Virgin agreed to combine its operations with mobile operator O2, which would create a telecom giant worth a reported £31.4 billion. The deal is currently being investigated by the UK’s Competition and Markets Authority.

Source: Pitchbook