TalkTalk agrees £1.1bn takeover by Toscafund, Penta

UK broadband provider TalkTalk on Thursday said it had agreed a £1.1bn takeover by Toscafund and private-equity investor Penta that will see the telecoms group taken private with founder Charles Dunstone retaining a stake.

The company said shareholders will receive 97p cash per share, a 16.4% premium to the share price on October 7, the day was before the offer was first proposed. The takeover will be financed by £527m of debt.

Tosca Penta, which owns 29% of the company, said “operating in the public listed markets is not optimal” for TalkTalk and its future could be best delivered as a private firm “without the significant governance, cost, regulatory and financial reporting burdens of a company listed on the London Stock Exchange”, TalkTalk said in a statement.

It added that TalkTalk will benefit from access to different forms of equity and debt financing structures “that are not readily available to listed companies”.

Tosca, Dunstone other longstanding TalkTalk shareholders have agreed to the deal, meaning that the offer now had 76% in irrevocable acceptances.

Dunstone said said he was pleased to remain a major shareholder in the company at a time when the UK rapidly upgrades broadband networks to full fibre lines.

“The telecoms industry is going through a fundamental re-set and we are keen to play our part in it,” he said.

TalkTalk added that it had pulled financial guidance for the year due to the impact of Covid-19 on its business and also announced that chief financial officer Kate Ferry said she would be leaving the company after three and a half years in the role.

The deal is the latest consolidation in the sector, exemplified by the proposed £31bn merger of Liberty Global's Virgin Media with O2, the mobile network owned by Spain's Telefonica, now the subject of an in-depth competition probe.