Shares in broadband provider Tiscali have been suspended after a sale of its UK business to BSkyB collapsed.
Tiscali had been in talks with BSkyB since November 2008, but said on Friday that worsening market conditions made it ‘impossible to proceed’ with a deal.
Tiscali will also ask lenders to suspend interest payments and covenant terms as it attempts to restructure its 500 million euro (£453 million) debts.
Broadband big players
Tiscali had almost 1.8 million UK broadband customers at the end of September last year, making it the UK’s fifth biggest broadband supplier.
Sky is currently the UK’s fourth biggest broadband firm with just under two million customers. A deal for Tiscali would have helped it leapfrog phone and broadband company TalkTalk to become the country’s third biggest broadband player, behind BT and Virgin Media, which are the two biggest UK broadband providers.
A BSkyB spokesperson said: ‘We have always said we will look at opportunities that come up in our sector (but) we will always take a very disciplined approach to acquisitions.’
Reports in December suggested that BSkyB had offered around £100 million less than the £450 million price being sought by Tiscali.
Tiscali payments due
Tiscali, which employs around 700 staff in the UK, is due to make interest payments totalling around 11 million euros (£10 million) to banks on Wednesday and Friday.
Tiscali’s board is currently drawing up new business plans to put the broadband firm’s finances on a sounder footing and will postpone its full-year results to the end of the month.
These are expected to show revenues of around 1 billion euro (£900 million) and underlying earnings of around 200 million euro (£181 million), below its August target.
© Press Association 2009
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