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Carphone Warehouse to bid for Tiscali and become UK’s largest broadband provider

04 April 2008 / by Joy Tibbs
According to reports, Italian tele-communications company Tiscali is up for sale. And the companies interested in buying the UK arm are said to include BT, BSkyB and Carphone Warehouse.

Tiscali is currently the fourth largest internet service provider in the UK after Virgin Media, BT and TalkTalk. However, if Carphone Warehouse – which owns Talk Talk – were to buy the business, it would leapfrog all other providers to become the UK's largest broadband provider. Tiscali has approximately 1.7 million customers in the UK.

The company's most recent financial report shows that it has been making up ground recently, having recorded a net loss of just €65.2 million for 2007 compared with €130.6 million in 2006. Its consumer numbers have grown in the last year and revenues have also risen.

However, Tiscali's chief financial officer, Massimo Cristofori, said that the company is reluctant to divide up its business. Its UK arm is reportedly worth between £550 million and £600 million and the company has turned down previous acquisition offers. No formal offers have been received as yet, either for the company as a whole or for its components.

Tiscali's share prices rose 13 per cent when the news broke that it had hired JPMorgan Chase and Intesa Sanpaolo’s Banca IMI to consider the company's options. Despite this, Carphone Warehouse – which appears the most likely acquisitor – claims it will only buy the company "at the right price".

Its most recent takeover was AOL UK in October 2006, for which it paid £380 million. The move added 2.1 million subscribers to its customer list. Meanwhile, Tiscali's most recent acquisition was rival firm Pipex back in September 2007, which elevated it into fourth place in the UK broadband providers' list at a cost of £210 million. Its UK arm accounts for approximately two thirds of the company's global revenues.

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