Carphone Warehouse plans bid for Tiscali broadband business

After the failure of BSkyB to negotiate a successful deal with Tiscali, Carphone’s TalkTalk home broadband is hoping to be able to secure the Italian company for a bargain price.

Having been in trouble for months, the internet company had initially placed the UK business up for sale for £500m, but BSkyB only offered to pay about £250m and negotiations stopped as it became clear that valuations were not going to be agreed.

Tiscali has been suspended from the Italian stock exchange due to being unable to pay off interest payments and had planned for a quick and efficient sale of the UK business to cover some of the £558m debts.

However this has not proved to be the case and, during this time, the business has been losing customers as in September, these numbered 1,774,000 down from the 1,838,000 just three months previously.

Given the desperate situation of Tiscali, a deal is likely to be concluded soon, although there is also separate speculation that BSkyB is considering renewing talks.

There has been a stay of execution as Tiscali’s creditors have agreed to temporarily suspend interest payments on its debts, however without a buyer in the short-term, the UK business will enter administration.

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