Sky Rejects Tiscali Acquisition Amidst Global Slowdown

UK’s fifth largest broadband service provider, Tiscali, is struggling hard to survive after its most serious buyer, broadcaster BSkyB, pulled out of a proposed deal.

Shares in this Italy-based broadband service provider plunged by around 40 percent, after its proposed sale of its UK assets to BSkyB collapsed, leaving the firm valued at a mere £90 million.

The broadband company stated that it had been in discussions with BSkyB since November, but notified on Friday that the miserable economic conditions has eventually hindered the deal to be materialised.

In a bid to cope with the situation, Tiscali, which has a staff-strength of 750 people in UK and a whopping 1.8 million broadband users in UK, asserted that it would urge its banks to suspend debt repayments and interests, while it revamps its financial structure.

The broadband provider currently owes around 500 million Euros as outstanding debt, and its next interest payments of around 11 million Euros are to be paid on 11 March and 13 March.

Responding to the collapse of the proposed sale, BSkyB’s spokeswoman said in a statement, “We have always said we will look at opportunities that come up in our sector (but) we will always take a very disciplined approach to acquisitions”.

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Our Comments

It seems that it will only be a matter of weeks now before the fifth largest UK ISP is dismantled and sold to the highest bigger. Tiscali has been terminal for a few months already (ed: actually it's been more than a year now) and although Sky is seen as the best suitor for now, another white knight (Vodafone?) could step in and acquire Tiscali

Related Links

Tiscali sale talks with BSkyB end

(BBC)

Tiscali fights for life after UK sale collapse

(Times Online)

Tiscali in trouble after sale collapse

(Guardian)

Tiscali sale to Sky stalls amid economic downturn

(Brand Republic)

Tiscali shares crash after Sky sale fails

(Mail Online)

Tiscali debt mounts as UK sale fails

(Press Association)