Carphone buys up Tiscali UK

UK retailer the Carphone Warehouse has snapped up internet service provider Tiscali UK for £236m in cash, ending years of speculation.

On Friday, Carphone Warehouse’s broadband and fixed line operation, TalkTalk, announced the deal, which will leave it with a total of 4.25 million consumer subscribers and coverage of 25 per cent of all UK households.

The possibility of such a move has generated plenty of speculation over the past two years. Tiscali has for some time been looking to raise substantial cash with two mutually exclusive goals in mind: either investment in the Italian market, where there is still enormous growth potential; or investment in alternative markets where there is significantly more growth potential than in the UK.

Analysts at investment firm Execution said Thursday that £250m “would be a good price”, although the researchers also noted that: “The offer is well below the range apparently sought by Tiscali, but the company is on its knees and may have little option but to accept.”