TalkTalk said that its board has agreed to progress the proposal made by Toscafund, the telecoms company’s second-largest shareholder, but that the hedge fund would have to get the backing of executive chairman and founder Charles Dunstone. Dunstone is TalkTalk’s largest shareholder with an almost 30% stake. Toscafund, which is chaired by Martin Gilbert, has a similar sized stake.
“The board has considered the terms of the proposal and has agreed to progress the proposal further with Toscafund along with taking advice from the company’s advisers,” the company said in a statement.
Toscafund’s 97p-a-share offer values TalkTalk at £1.2bn, including debt the deal would be worth about £2bn. Last year, Toscafund reportedly made an offer valuing the business at 135p-a-share which was rebuffed by management, according to a report by Sky News in July. TalkTalk was trading at 120p in February, shortly before the UK went in to a nationwide lockdown due to the coronavirus pandemic.
“It looks like TalkTalk’s ultimately unhappy stay on the markets could be coming to an end,” said Russ Mould, investment director at AJ Bell. “TalkTalk was always positioned as the cheaper alternative to the likes of BT, Sky and Vrgin Media for broadband and other services but ultimately it struggled to gain traction in a highly competitive marketplace and growth has really stalled in recent years.”
Mould points out that the 97p-a-share offer is less than a third of TalkTalk’s peak level around five years ago.