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Virgin Media O2 and TalkTalk renew takeover talks


Virgin Media O2 and TalkTalk renew takeover talks By Proactive Investors

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Published Feb 12, 2024 09:04

© Reuters. Virgin Media O2 and TalkTalk renew takeover talks

Proactive Investors – Virgin Media O2 (VMO2) has reignited discussions for a potential acquisition of TalkTalk’s consumer division, according to a Telegraph report.

The move marks a renewed interest after a previously contemplated £3bn deal, including debt, was shelved two years ago due to market and regulatory uncertainties,

TalkTalk is considering divesting its consumer segment as part of a broader restructuring to manage a pressing need to refinance its debts.

TalkTalk consumer division has around 2.4 million residential users, recently expanded by the acquisition of half a million Shell PLC (LON:SHEL) customers from Octopus Energy (LON:ORIT).

This potential acquisition by VMO2 aims to bolster its retail customer base and enhance its footprint in the market’s value segment.

A key component of the deal could be a wholesale agreement with TalkTalk, with VMO2 planning a transition of these customers to its full-fibre network eventually.

However, the talks are reportedly in their infancy, and there’s no assurance that an agreement will be reached.

Financial strain has led TalkTalk to initiate a breakup of its operations, having already divested its business division for £95 million to a vehicle controlled by its primary investors.

Furthermore, the company is exploring the sale of a stake in its wholesale operations to US-based DigitalBridge, alongside plans to separate the consumer division post-refinancing.

TalkTalk reported a loss of 100,000 retail customers in the first quarter of 2023 as it curtailed its sales and marketing expenditure by 40%.

The company has also sought to extend credit terms with suppliers to up to 300 days in an effort to bolster its liquidity.

Read more on Proactive Investors UK


Virgin Media O2 and TalkTalk renew takeover talks

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