Salford’s TalkTalk agrees £1.1bn deal to go private

Salford-based broadband giant TalkTalk Telecom Group said on Thursday it agreed a £1.1 billion takeover for 97p per share by shareholder Toscafund and private equity firm Penta.

The cash transaction would take TalkTalk private and off the stock market.

The offer represents a 16.4% premium to the TalkTalk closing price of 83.3p on October 7, 2020, the last business day before the commencement of the offer period.

TalkTalk’s shares rose above the offer price to about 100p on Thursday afternoon.

Toscafund and Penta have formed Tosca IOM to acquire TalkTalk.

Tosca IOM said TalkTalk directors owning 44.6% of the company’s shares that are eligible to vote on the deal — including the company’s largest investor Charles Dunstone — have agreed to the offer.

However, these irrevocable undertakings “will lapse and cease to be binding” if TalkTalk gets another offer of at least 115p per share.

TalkTalk chairman Charles Dunstone said: “I am pleased to have the opportunity to continue to be a major shareholder in TalkTalk.

“My decision underlines my passion for the company and the confidence the senior management team and I have about our journey ahead.

“That said, as the UK transitions to full fibre we have a hugely challenging, but exciting opportunity.

“Being a private company would allow us to accelerate adoption and focus on our role as the affordable provider of fibre for businesses and consumers nationwide.

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

In a separate statement, TalkTalk said chief financial officer Kate Ferry is leaving the firm.

“Phil Eayres will become chief financial officer of TalkTalk when Kate steps down,” said TalkTalk.

“Phil has worked with the business for over six years, initially as operations director in consumer and more recently as an independent strategic advisor leading the development and disposal of FibreNation, as well as the strategic planning for the group, whilst also playing a key role in working on the proposed acquisition.”

TalkTalk CEO Tristia Harrison said: “As the business potentially goes private and now that we are primarily North-West based, Kate has decided that it is the right time for her to leave TalkTalk and live and work in London.

“I want to personally thank Kate for being by my side throughout the last few years; her tenacity and focus has been central to the transformation and simplification of the business; the board and I wish her every success in the future. 

“I am also delighted that Phil has accepted the role of CFO to replace Kate.

“Phil has worked alongside me and the board for over six years; and has been a driving force behind leading the group’s work on Full Fibre including the successful sale of FibreNation to CityFibre.

“He also has a long career in finance; and it is this mixture of financial, commercial, and strategic expertise that makes him the ideal candidate to help lead us going forward.”

TalkTalk also published interim results for the half year to September 30, 2020, showing statutory revenue contracted 6.6% to £740 million.

In its outlook, TalkTalk said: “Given the ongoing uncertainty created by COVID-19, we will be withdrawing the current full year EBITDA guidance and we will not be providing updated formal guidance.”