Bid for Tiscali plotted by Carphone Warehouse

Following a withdrawal from last years talks Carphone Warehouse is now contemplating making another last minute bid for the broadband business assets of Tiscali UK.

The bid will follow the negotiation breakdown between BskyB and the Italian Company, which would have seem BskyB’s customer base swelling to 3.6 million and would have made the satellite broadcaster the third biggest provider of residential broadband in the country. The considering of a renewal of talks by BskyB has also been speculated.

With the current state of Tiscali it is hoped by Carphone’s home broadband division TalkTalk that it will be able to buy the telco at a bargain price. It is currently believed that Tiscali is very close to falling into administration.

Following warnings that the company would not be able to meet its interest payments Tiscali had its shares suspended on the Italian stock exchange earlier this month. The plan had been for the company to pay its €601m (£558m) debt with the money made from its sale.

It had been understood that BskyB had only offered £250 million to buy Tiscali even thought the Internet provider had initially put the business up for sale for around the £500 million mark.

For quite a while the Tiscali UK business had been seeing a huge drop in its customer base. In September 2008 the company had 1 774 000 customers, which was a drop from the previous quarter figure of 1 838 000.

With an agreement made by its creditors to suspend payment of interest owing last Friday Tiscali had been given a brief reprieve, although if the company doesn’t find itself a buyer soon many analysts predict that the company will fall into the hands of the administrators. Customers would be sold to an alternative provider at a reduced price should Tiscali collapse at any point.

A consideration that Carphone fixed line and broadband business, TalkTalk may be split from its retail stores, which will convert into a new joint venture with American electronics group and will be called Best Buy Europe, was publicly announced by Mr Dunstone.