Toscafund Asset Management has made a cash offer with the intent of taking the MVNO private
TalkTalk have today confirmed that a £1.1 billion takeover proposal has been made by London-based hedge fund, Toscafund Asset Management. The deal offers to buy the business in full for 97 pence per share, a 16% premium on TalkTalk’s closing share price on Wednesday.
“The board has considered the terms of the proposal and has agreed to progress the proposal further with TAM (Toscafund Asset Management) along with taking advice from the company’s advisers,” said TalkTalk in a statement.
This is not the first time Toscafund have made a bid for a TalkTalk takeover. As the MVNO’s second largest investor, owning around 30% of the business, Toscafund made a takeover bid last year at £1.35 per share, but the deal was rejected by the TalkTalk board.
Since then, TalkTalk’s share value has plunged, diving around 30% since the start of 2020, meanwhile Toscafund has gradually been increasing its stake in the company.
The proposal includes a number of preconditions, including that the company “receives an irrevocable undertaking from [TalkTalk executive chairman] Sir Charles Dunstone in support of such Offer.” Sir Charles, who founded Carphone Warehouse and launched TalkTalk in 2013, is the operator’s largest shareholder, owning a slightly larger stake than Toscafund.
Toscafund is required to announce a firm intention to make an offer by the 5th of November. TalkTalk’s shares surged 16% upon news of the announcement.
This is not the first time TalkTalk has hit the news this week, with the operator yesterday in the news being critical of Openreach and regulatory standards that have allowed the UK’s largest broadband provider to hike up their prices.
“Investment into Britain’s full fibre rollout is critical. But it’s got to be affordable – people cannot be forced to pay higher prices just to increase the profits for those building the network,” said CEO of TalkTalk, Tristia Harrison. “So TalkTalk is asking the Government and Ofcom to make sure that competition thrives and that prices are fair for hard-pressed Britons.”
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