ISPs may bid for TiscaliBT, Sky and Carphone Warehouse could be buyers

05 April 2008

BT Group, BSkyB and Carphone Warehouse are said to be considering offers for the UK arm of Tiscali, the Italian telecoms firm.

The business is effectively up for sale after the Cagliari-based company's board allowed its new chief executive to look at ways of 'maximising the strategic value' of Tiscali.

The Financial Times said the three biggest British broadband providers were all interested in looking at Tiscali's books for the UK assets. 

The Italian company has received approaches in the past, but said on Monday there had been no formal offers for the company or individual assets.

Carphone Warehouse

Tiscali UK could be valued at between £550 million and £600 million, which an analyst said equated to around £382 per broadband subscriber.

Should Carphone acquire Tiscali's UK assets, it would become the largest internet service provider in the country - ahead of BT and Virgin Media. 

The TalkTalk operator completed the biggest deal in its history in 2006 when it acquired AOL UK for £380 million.

Last September, Tiscali transformed itself into the UK's fourth-largest broadband provider when it bought rival Pipex for £210 million. 

Pipex

However, the FT said some City analysts still question whether Tiscali has sufficient scale to remain independent.

Tiscali's chief financial officer suggested this week the company would prefer not to break itself up.

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