Founder backs £1bn TalkTalk takeover deal
TALK TALK founder Sir Charles Dunstone has backed a £1.1bn takeover of the budget broadband provider that will see it go private.
The deal struck with Toscafund and Penta Capital is the latest swoop on a listed British company this year, following similar sales of insurer RSA, gambling giant William Hill and retirement housebuilder McCarthy & Stone.
Shareholders will be paid 97p per share or they can retain their holdings, with Dunstone, 56, set to keep his 30pc stake.
He said going private would allow Talk Talk to speed up its introduction of more lucrative fibre broadband services.
He said his decision to stay involved ‘underlines my passion for the company and the confidence I have about our journey ahead’.
Toscafund is run by Martin Hughes, who is known as ‘the Rottweiler’ in City circles because of his aggressive style when agitating for change at firms he invests in.
It now has £3bn of assets under management and is chaired by City grandee Martin Gilbert, cofounder of Aberdeen Asset Management.
The fund has taken seven public companies private, including telecoms firm Daisy Group in 2014. It is the second-biggest investor in Talk Talk behind Dunstone, with 29.5pc, and unsuccessfully tried to buy the company out last year. Tosca will need to win 75pc support of the remaining shareholders to push through its latest proposal, but with existing commitments from Dunstone and the firm’s directors it has already mustered 45pc.
One of the shareholders is David Ross – who co-founded Carphone Warehouse with Dunstone and owns an 11.3pc stake. At this stage it is unknown how Ross will vote. A source close to him said he was currently sitting on the fence.
Talk Talk was founded in 2003 as part of the Carphone Warehouse business. It was later spun off and listed separately in 2010 with Dunstone returning to take control in 2018 as executive chairman, but the firm continued to struggle.
Talk Talk said yesterday that it had delivered a ‘robust’ performance in the six months to September, with customer data usage jumping 40pc as the pandemic caused people to spend more time at home.
But the firm slipped from a £1m profit into a £3m loss after revenues tumbled from £792m to £740m. It blamed the Covid-19 crisis.