Virgin Media O2 reportedly revives talks to acquire TalkTalk consumer arm

Source: TalkTalk

Liberty Global and Vodafone-owned Virgin Media O2 is back in talks with TalkTalk about a potential takeover of the latter’s consumer division, according to a report in the Telegraph newspaper.

According to the report, discussions are at an early stage, with no guarantee of a final agreement.

The latest talks come after talks about a full takeover of TalkTalk failed in 2022 amid uncertainties over whether a deal would be approved by regulators and economic uncertainties.

The Telegraph reported at the time that access to the credit markets and the risk of the UK competitive watchdog nixing the deal were key concerns.

News of the possible merger of the pair last year had originally been reported by Sky News in July, with the Liberty Global-Telefónica JV reportedly submitting an offer that valued TalkTalk at around £3 billion.

However, the latest talks would focus on the consumer division only.

TalkTalk break-up and Tristia Harrison departure

TalkTalk is planning to break up into three separate entities, with outgoing CEO Tristia Harrison to depart once the split is complete, scheduled to happen on March 1.

TalkTalk had earlier put its business-to-business division up for sale, with that unit now acquired by a special purpose vehicle for £95 million..

After the split, the wholesale division will be headed by Tom O’Hagan, founder of Virtuall, acquired by TalkTalk last year, who is current MD of TalkTalk Business Wholesale. The former Managing Director of iD Mobile and current MD of TalkTalk Consumer and Supply and Partnerships, Adam Dunlop, will head up the consumer division.

TalkTalk has about 2.4 million residential customers, including half a million Shell customers acquired from Octopus Energy.

According to the Telegraph, a deal would likely involve a wholesale agreement back to TalkTalk, but VMO2 would ultimately seek to migrate customers to its full fibre network.

TalkTalk has already warned of “material uncertainty” over whether it would be able to continue operating ahead of refinancing of debt that must be achieved by August.