UK ISP TalkTalk ready to go PrivatePrivate, says yes to £1.1bn takeover offer
- Reference: 1608210912
- News link: https://www.theregister.co.uk/2020/12/17/talktalk_approves_1_point_1_billion_takeover/
- Source link:
The terms of the deal are [2]unchanged from the original bid , valuing each share at 97p. This represents a 16.4 per cent premium on the pre-offer closing price of 83.3p in October, but still a slight discount on the 52-week high of 124.84p.
Shareholders unwilling to take the cash buyout will be able to exchange their stake for shares in the acquired company, which will not be listed on any exchanges.
Philip Carse, chief analyst at Megabuyte, said this alternative share offer may merely be a mechanism to allow Dunstone to maintain his stake in the business as it goes private.
In a statement issued to the London Stock Exchange today, Dunstone said:
“I am pleased to have the opportunity to continue to be a major shareholder in TalkTalk. My decision underlines my passion for the company and the confidence the senior management team and I have about our journey ahead. That said, as the UK transitions to full fibre we have a hugely challenging, but exciting opportunity.
“Being a private company would allow us to accelerate adoption and focus on our role as the affordable provider of fibre for businesses and consumers nationwide. The Telecoms industry is going through a fundamental re-set and we are keen to play our part in it,” he added.
The takeover deal is subject to regulatory approval, and is expected to close on or before March 31, 2021.
It will also see some leadership changes, with TalkTalk CFO Kate Ferry stepping down. Her replacement will be Phil Eayres, who previously served with the company as an operations director in its consumer division, as well as an independent advisor in the [3]disposal of its FibreNation Subsidiary . Eayres' LinkedIn page also lists stints at South African supermarket Pick 'n Pay, equity fund Bain & Company, and alcohol giant Diaego.
Toscafund had previously offered to buy TalkTalk in 2019, offering 135p per share in a deal that was ultimately rejected. This new, lower price is reflective of the challenges faced by the telecoms sector, not merely by the pandemic, but also by changing consumer habits which continue to impact traditional profitable areas, like fixed-line telephony.
Coinciding with this news, TalkTalk also released its [4]interim results for the six months ending September 30. The figures illustrate the challenges faced by the firm, which saw revenues decline by 6.6 per cent year-on-year to £740m, attributed to lower voice spending, as well as a contraction in the customer base.
Operating profits for the period declined to £20m, down £9m from the same quarter last year. The group said "trading restrictions" and the removal of "call usage caps" during COVID-19 dented income. ®
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[1] https://www.londonstockexchange.com/news-article/TALK/recommended-acquisition/14796255
[2] https://www.theregister.com/2020/10/08/talktalk_to_consider_takeover_offer/
[3] https://www.theregister.com/2020/01/21/talktalk_fibrenation_cityfibre/
[4] https://www.talktalkgroup.com/article/talktalkgroup/2020/interim-results-fy21
[5] https://whitepapers.theregister.com/
The other thing about going private...
The other thing about going private is that they'll be saved the pain of having to report their ongoing demise to the market analysts every quarter... shame that eh?
"The group said "trading restrictions" and the removal of "call usage caps" during COVID-19 dented income."
What call usage caps have been removed? They're talking a load of wankwank. But then Dodo Harding gave their consumer arm such a bad reputation.
Shall we open a sweepstake on how long Talk Talk survives?
My understanding of this process is that the firm is taken private by borrowing a vast sum of money, which is loaded in to debt for the holding company.
Next all but the central part that is making the most money is sold off or closed to give an apparently really profitable business.
This is then floated again, but the company is saddled with the massive debt from the going-private process, so as soon as the profitability drops off the debt repayment becomes too much and the company goes bust.
FFS
"The group said "trading restrictions" and the removal of "call usage caps" during COVID-19 dented income."
What trading restrictions and who on earth makes money from calls now in an age of WhatsApp or Skype? Right at a time that most of the UK has been living under severe local restrictions fast, reliable broadband is now no longer a nice-to-have but a fundamental necessity and I am sure that TalkTalk have a nice big share of that pie. Especially consider that having multiple owners of broadband infrastructure competing to deliver to the network does not translate into more competition and most certainly has not translated into better outcomes for consumers as companies like TalkTalk have actually increased their charges during the pandemic.
TalkTalk, as usual, appear to have confused their mouth with their Dido Harding.