Talktalk to go private after £1.1bn Toscafund deal
Talktalk has this morning announced that it will be taken private in a £1.1bn deal with shareholder Toscafund and private equity firm Penta.
Under the offer, shareholders of the broadband supplier will receive 97p per share, a 16 per cent premium on shares as of 7 October, when the offer was first made.
The deal is a step down from previous offers for the telecoms firm, with Toscafund itself previously going in at 135p per share.
It comes amid a spate of consolidation in the telecoms sector, including the proposed £31bn merger of O2 with Liberty Global’s Virgin Media.
The sale follows a challenging couple of years for Talktalk, which has found itself operating in the shadows of bigger rivals such as BT and Sky.
Talktalk currently has around 4m customers, a fraction of the base commanded by its peers.
CMC Markets’ Michael Hewson said that today’s deal would hopefully give Talktalk the “necessary firepower’ to compete with bigger players.
The deal will see founder Sir Charles Dunstone roll over his 29 per cent stake in the firm. He said:
“I am pleased to have the opportunity to continue to be a major shareholder in TalkTalk. My decision underlines my passion for the company and the confidence the senior management team and I have about our journey ahead.
“That said, as the UK transitions to full fibre we have a hugely challenging, but exciting opportunity. Being a private company would allow us to accelerate adoption and focus on our role as the affordable provider of fibre for businesses and consumers nationwide.”
London-based Toscafund has assets of around £4bn and is run by ex-Tiger Management banker Martin Hughes, who is known as the “Rottweiler”.