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Virgin Media O2 tests waters with £3bn inaugural bid for TalkTalk | business news

Virgin Media O2 has made an offer to buy TalkTalk that would value one of the UK’s largest broadband providers at around £3bn.

Sky News has learned that the mobile phone giant, jointly owned by Telefonica and Liberty Global, has made an indicative offer for Salford-based TalkTalk in recent weeks.

Talks between the two sides are at an early stage and will be held on a non-exclusive basis, city sources said on Friday.

The development comes three months after it emerged that TalkTalk had received a number of tentative approaches from industry competitors including Vodafone and Sky, Sky News’ immediate parent company.

Sir Charles Dunstone, Founder and Chairman of TalkTalk, and Toscafund, which helped take the company private in late 2020, believe the company is now worth at least £3bn.

Lazard, the investment bank, advises TalkTalk on the interests of bidders such as Virgin Media O2.

The acquisition of TalkTalk, whose website says it has a total of 4.2 million customers and 2.4 million fiber connections across the UK, would be a logical step for VMO2 given the scale of the anticipated synergies.

A formal offer from the company would also increase pressure on Nick Read, Vodafone’s CEO, to make a counter-offer.

Any strategic deal involving TalkTalk would represent the latest move in consolidation in a market where industry executives have consistently highlighted the need to find savings to invest in modernizing Britain’s digital infrastructure.

Openreach, the infrastructure arm of BT Group, and CityFibre Holdings have both accelerated plans to roll out all-fiber connectivity across the UK, with a host of smaller players also emerging to grab a slice of the market in recent years.

TalkTalk also offers a Pay TV service which includes content from Sky and BT Sport branded channels.

TalkTalk was founded by Sir Charles in 2004 when it was part of Carphone Warehouse – from which it was later spun off – and went public about 18 months ago.

The deal to take it private valued it at around £1.8bn including debt.

VM02 and TalkTalk declined to comment Friday.

Virgin Media O2 tests waters with £3bn inaugural bid for TalkTalk | business news

Source link Virgin Media O2 tests waters with £3bn inaugural bid for TalkTalk | business news

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