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TalkTalk considers £1.1bn approach from Toscafund
8th Oct 2020 07:57
(Sharecast News) - TalkTalk is in discussions to be taken private by Toscafund Asset Management after the investment firm approached it about a cash offer valuing the company at £1.12bn.
Toscafund's 97p a share proposal values the shares at 16.4% more than Wednesday's closing price. It contains a number of conditions including that Charles Dunstone, TalkTalk's founder and executive chairman, supports the deal and agrees to "an election for any unlisted share alternative" for his shares in the company.
"The board has considered the terms of the proposal and has agreed to progress the proposal further with TAM [Toscafund] along with taking advice from the company's advisers," TalkTalk said.
TalkTalk shares rose 16.7% to 97.22p at 09:41 BST, broadly matching the value of Toscafund's approach.
Neil Wilson, chief market analyst at Markets.com, said: "Charles Dunstone needs to approve the takeover for it pass. With no discount and no premium in the price this morning, the market seems to think he is."
Toscafund is reported to have proposed buying TalkTalk in 2019 for 135p a share but the board rejected the approach. The investment company, headed by Martin Hughes, increased its stake in TalkTalk to 29.1% from 28% in June. Dunstone bought 1m shares soon after and owns 20.86% of the company.
TalkTalk upgraded its full-year earnings guidance in July and reported imrpoved trading as Covid-19 lockdown measures eased. The business was affected earlier in the crisis when sporting events were scrapped and customers cancelled TV sports packages.
Dunstone launched TalkTalk in 2002 when he was the boss of Carphone Warehouse to compete with BT for landline business. It branched out into broadband in 2004 and demerged from Carphone Warehouse in 2010.
Dido Harding, now running the UK's Covid-19 track and trace system, was chief executive after the split until 2017. Dunstone became executive chairman to get a firmer grip on the company when Harding left.
Toscafund's 97p a share proposal values the shares at 16.4% more than Wednesday's closing price. It contains a number of conditions including that Charles Dunstone, TalkTalk's founder and executive chairman, supports the deal and agrees to "an election for any unlisted share alternative" for his shares in the company.
"The board has considered the terms of the proposal and has agreed to progress the proposal further with TAM [Toscafund] along with taking advice from the company's advisers," TalkTalk said.
TalkTalk shares rose 16.7% to 97.22p at 09:41 BST, broadly matching the value of Toscafund's approach.
Neil Wilson, chief market analyst at Markets.com, said: "Charles Dunstone needs to approve the takeover for it pass. With no discount and no premium in the price this morning, the market seems to think he is."
Toscafund is reported to have proposed buying TalkTalk in 2019 for 135p a share but the board rejected the approach. The investment company, headed by Martin Hughes, increased its stake in TalkTalk to 29.1% from 28% in June. Dunstone bought 1m shares soon after and owns 20.86% of the company.
TalkTalk upgraded its full-year earnings guidance in July and reported imrpoved trading as Covid-19 lockdown measures eased. The business was affected earlier in the crisis when sporting events were scrapped and customers cancelled TV sports packages.
Dunstone launched TalkTalk in 2002 when he was the boss of Carphone Warehouse to compete with BT for landline business. It branched out into broadband in 2004 and demerged from Carphone Warehouse in 2010.
Dido Harding, now running the UK's Covid-19 track and trace system, was chief executive after the split until 2017. Dunstone became executive chairman to get a firmer grip on the company when Harding left.