Carphone Warehouse Emerges As Tiscali Buyer

The daily Italian news outlet, MF, reported that Carphone Warehouse is putting roughly £200 million on the table for the struggling internet service provider, which is almost a third of the sum the company offered to Tiscali last year for its UK broadband arm.

At that time, Tiscali wanted more than the £450 million Carphone Warehouse were ready to offer. Back in April 2008, the Financial Times reported that Tiscali was actually after more than £600 million with Sky and Carphone Warehouse being the potential buyers.

Tiscali has purchased a number of smaller ISPs over the years like Bulldog broadband, Toucan, Homechoice and Pipex for £210 million. This acquisition spree, to some extent, has been the root of Tiscali financial problems.

Carphone Warehouse already has a number of broadband brands to its name - AOL UK, Opal, Talktalk are some of the few that reside under the CW umbrella. Should Tiscali be acquired, it will propel Tiscali to the first place but before that, many will watch closely how low Tiscali asking price can fall.

With a bit of luck, maybe Vodafone, BSkyB or a third party could snatch Tiscali before Carphone Warehouse does and since it is in the process of splitting its Talktalk arm, Tiscali UK could well become part of the latter.

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Our Comments

The acquisition of UK's fifth ISP company by the third-largest will create a giant to rival Sky, BT and Virgin media and will, interestingly, make Talktalk a five-play player as CW will also acquire the remains of Homechoice's TV brand. And Carphone Warehouse is already making a number of low profile announcement including the rehauling of the Opal brand, which it acquired in 2002.

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