New Tiscali sale to BSkyB over? -
Tiscali sale to BSkyB over?
One month ago the sale of broadband supplier Tiscali’s UK assets seemed a certainty, and expected to take place by about now. But the further erosion of Sterling’s value against the Euro has placed the deal in jeopardy. Tiscali boss Mario Rosso now seems to be saying the deal is almost impossible to pull off.
A year ago Tiscali’s UK assets were worth around £600m. Carphone Warehouse made a bid of £450m for Tiscali’s British assets, a price which now seems extremely generous. The BSkyB ‘bid’ is reportedly to have been less than £450m. Tiscali, as well as being a poorly regarded broadband supplier, is perhaps better known as the owner of the Video Networks/Home Choice service, which has struggled since inception.
However, Tiscali’s share price has tumbled 83% over the past year and trading in its shares was suspended Friday Mar 6. A Board statement from Tiscali said: "Given the time frame of the negotiations with BSkyB for the disposal of certain UK assets of the Tiscali Group, which have not resulted in an agreement to date, due to the worsening of the market environment in which the potential buyer also operates, the Board of Directors has acknowledged that it is de facto impossible to proceed with the above mentioned negotiations."
Tiscali has also asked its bankers to suspend its interest payments due this week, and will be placing what it describes as a “new plan” to its Board on March 27. Long term debt stands at €500m, and it has payments to meet this week (on March 11 and 13 for a total of €11m).