As exclusive negotiations to sell its wholesale network to Octopus Investments draw nigh, TalkTalk, one of the largest telecoms and broadband providers in Britain, is in danger of disintegrating.
According to information obtained by Sky News, advisors to TalkTalk are getting ready this weekend to start advanced negotiations on a purchase of PlatformX Communications (PXC) with Octopus, which oversees the broadband infrastructure company Fern Trading.
The private equity firm Epiris, which has been collaborating with PXC’s executive chairman, Tom O’Hagan, on a possible deal for several months, is said to have rejected Octopus Investments.
While Octopus Investments completes the deal’s financing, a period of exclusivity is anticipated to extend several weeks.
Vorboss, an enterprise fibre company, and AllPoints Fibre, a retail business, are among Fern Trading’s assets, which also include real estate and renewable energy.
One of Britain’s most well-known businessmen, Sir Charles Dunstone, created TalkTalk more than 20 years ago. If the purchase is finalised, it would signal the company’s complete dissolution.
City sources reported this weekend that Opus Broadband, a company headed by Tahir Mohsan, the former CEO of Tiny Computers, has expressed interest in bidding for TalkTalk’s remaining business, its consumer division, which services roughly 1.8 million users.
Additionally, it has been claimed that VodafoneThree shown interest in purchasing TalkTalk’s consumer segment, which is anticipated to be sold later this year.
Sources warned that if a deal cannot be reached, the retail business may continue under TalkTalk.
This past weekend, it was unclear how the different transactions involving TalkTalk assets would be carried out, should they proceed.
According to banking sources, Octopus Investments would value PXC at several hundred million pounds if it were to move forward with a formal bid.
Due to a significant transaction involving Fern Trading, Octopus Investments informed backers of its Octopus Inheritance Tax Service (OITS), which enables investors to receive returns free of inheritance tax responsibilities, that it was pausing applications and redemptions this week.
According to a person with knowledge of the matter, the reference was to the potential agreement with PXC.
TalkTalk’s consumer division is reportedly valued similarly to PXC, and the company still has a substantial debt load following several refinancings spearheaded by the massive investment firm Ares Management.
As recently as February, Ares, a shareholder in TalkTalk, led an agreement to invest an additional £115 million in the company.
In an agreement spearheaded by Sir Charles’s private investment firm and Toscafund Asset Management, TalkTalk, which was established with the intention of upending the British consumer telephony sector, went private in 2021.
Since then, it has had long-term cash flow issues, which have been made worse by a decline in its retail clientele. As a result, the group’s valuation has drastically decreased over the past five years.
TalkTalk and Rise Fibre, a young competitor in the consumer broadband market, reached an agreement last week to transfer 120,000 subscribers.
Nonetheless, it is still one of the biggest broadband providers in the nation, trailing only Virgin Media O2, BT Group, and Sky, the direct owner of Sky News.
TalkTalk has been receiving advice from the investment bank PJT Partners on the sale of PXC, one of the biggest telecom infrastructure suppliers in the UK.
Opus Broadband has been asked for comment, however TalkTalk, Ares, and Octopus Investments declined to comment.
After 20 years in business, one of the biggest broadband and telecommunications companies in the UK is about to be officially disbanded.
PlatformX Communications (PXC), TalkTalk’s wholesale network division, is about to be acquired by Octopus Investments, the owner of broadband infrastructure business Fern Trading.
TalkTalk advisers are reportedly getting ready to start advanced negotiations with Octopus this weekend in order to complete a deal, according to Sky News. An important turning point in TalkTalk’s long-standing business model reorganisation has been reached with this deal.
One of the most well-known businessmen in Britain, Sir Charles Dunstone, created TalkTalk almost two decades ago. In March 2010, it separated as a separate business from Carphone Warehouse, where it had previously been a subsidiary.
After BT Group, Sky, Virgin Media O2, and Vodafone, it is presently the fifth-biggest broadband provider in the UK. The Soapworks building on Ordsall Lane in Salford serves as the company’s headquarters.
According to industry insiders, Opus Broadband, a company led by Tahir Mohsan, the former CEO of Tiny Computers, has expressed interest in bidding for TalkTalk’s remaining business, its consumer division, which services roughly 1.8 million users.
Additionally, it has been stated that VodafoneThree has shown an interest to purchase TalkTalk’s consumer segment. Despite this interest, insiders warned that if a deal cannot be reached, the retail operation may remain under TalkTalk.
After earlier attempts to divide its direct-to-consumer broadband activities from its network asset holdings, the impending sale essentially marks the conclusion of TalkTalk’s formal demerger strategy.