TalkTalk Group said this morning that it is in advanced discussions to sell its PXC and TalkTalk Consumer businesses. The company said both transactions are in the final stages and expects them to conclude imminently.
The Strategic Update puts the two businesses in play at the same time, with the consumer arm and PXC linked by wholesale arrangements that would need to keep working after any sale. For customers and staff, the immediate question is how that relationship is carried over into any new ownership.
TalkTalk Group Strategic Update
TalkTalk Group issued the Strategic Update this morning on the sale of its UK broadband and PXC businesses. It said, "The Company is in advanced discussions regarding potential disposals of its PXC and TalkTalk Consumer businesses."
The company also said, "The Company is now in the final stages of its sales process for the businesses and expects to conclude both transactions imminently." TalkTalk Group added, "The Company will update stakeholders with further news in due course."
The update lands after recent reports that the group may have given until the end of this month to resolve its future. Another big payment to network supplier Openreach is expected to become due around the end of this month, adding a timing pressure point to the sales process.
Opus Broadband and PXC
Reports this week said TalkTalk had been engaging with Octopus Investments and Epiris over a possible sale of PXC. Other reports said Opus Broadband, backed by Alchemy Partners, had been engaged over the consumer business.
Opus Broadband was quoted as saying that its top priority is to ensure that every customer stays connected and that all TalkTalk employees’ roles are protected. That statement matters because the consumer business is strongly linked to PXC’s wholesale products, and any deal for one side of the business or the other would require agreement on how that relationship continues.
One report on Radio 4 Today put the acquisition cost per customer in the region of £60, which would imply around 1.6M customers and a total value of £96million for the consumer base. Earlier talk had been of a c.£250m deal for TalkTalk’s consumer business, while Opus Broadband reportedly tabled a low ball c.£100m bid this week.
For TalkTalk customers, the next practical marker is whether the buyer structure leaves the wholesale link intact enough to avoid disruption to service arrangements. For the company, the immediate task is to turn the sales update into signed transactions before the end-of-month pressure point arrives.
