TalkTalk rejected a takeover bid worth £1.5 billion from its second-largest investor last year, increasing speculation the company could be an acquisition target.
The offer valued TalkTalk at double it share price but it was deemed not to provide sufficient value to investors.
Toscafund confirmed to Sky News it made the offer but said it understood the reasons why it was rejected and that it was fully supportive of the current board and management.
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The asset manager added that TalkTalk was now in a much better position and it is believed Toscafund has increased its stake from 19 per cent to 29 per cent – the same as executive chairman Sir Charles Dunstone.
TalkTalk has reinvented itself as a ‘no-frills’ provider over the past few years, and has recently turned its attention to migrating customers from copper to fibre broadband.
It is unclear when the bid was made and whether TalkTalk still possessed its fibre network at the time. Last year, the company said it was seeking as much as £1 billion to fund the expansion of ‘FibreNation’ – a wholesale alternative to Openreach for TalkTalk, Sky and other broadband providers. However FibreNation was sold to CityFibre for £200 million in January.
Nonetheless, TalkTalk’s customer base of four million customers could be attractive as the UK market shifts towards convergence. BT acquired EE for £12.5 billion in 2016, while Virgin Media and O2 are set to combine into a £31 billion joint-venture. Sky, Three and Vodafone have all been potential suitors in the past.
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Via Sky News