Doubts surround the future of Salford-based telecoms and broadband supplier TalkTalk after exclusive acquisition talks with Octopus Investments are said to have ended.
The business, which has around 1.7 million retail customers, opened exclusive negotiations with Octopus in August this year for a deal to buy TalkTalk’s wholesale arm, PlatformX Communications (PXC).
Octopus manages broadband infrastructure group Fern Trading, which also spans renewable energy and real estate, and includes Vorboss, an enterprise fibre business, and a retail operation called AllPoints Fibre.
However, Sky News reports that TalkTalk is no longer in exclusive negotiations with Octopus, with insiders rating a deal between the two now as ‘remote’.
TalkTalk is said to have approached Epiris, a private equity firm which was linked with PXC earlier this summer.
Late last week Octopus and TalkTalk issued a joint statement saying “they are optimistic of delivering the proposed transaction and will update stakeholders with further news in due course”.
But they added: “There can be no certainty of any transaction completing.”
Epiris is currently involved in a takeover bid for London-listed Gamma Communications.
Failure to dispose of PXC would raise doubts over the future of the heavily indebted TalkTalk business.
Its key stakeholders, including Ares Management, have had to support the business in recent months, with Ares leading a deal to provide £115m for TalkTalk in February this year.
Professional services firm, Alvarez & Marsal (A&M), is said to be on hand to assist TalkTalk on achieving a satisfactory outcome.
Sky says TalkTalk has until the end of this month to find a solution, ahead of a significant payment due to BT Group’s Openreach division due.
Telecoms watchdog, Ofcom, is said to be monitoring the situation, with claims that BT could be asked to take on TalkTalk’s retail customers if the business were to collapse.
TalkTalk, Octopus Investments, Epiris, Ares and A&M have all declined to comment.