UK telecoms company TalkTalk Telecom Group and Tosca IOM, a newly-incorporated company formed by Toscafund and Penta, have reached an agreement on the terms of a recommended takeover offer for all of TalkTalk. Each shareholder will be entitled to 97 pence in cash per share.
The deal values TalkTalk at GBP 1.11 billion, with the offer price representing a premium of around 16.4 percent on the closing price of 83.3 pence per TalkTalk share on 07 October. Tosca Penta believes that TalkTalk has performed resiliently in 2020, but notes the material drop in its share price over the last 12 months. As a result, it has decided to delist the company from the stock market and take it private, believing that TalkTalk will benefit from the different forms of equity and debt financing structures not easily available to listed companies.
Following the acquisition, TalkTalk will invest in the development of simple full-fibre products for customers, aiming to further develop the TalkTalk brand. It will also invest to reposition the TalkTalk brand and build systems/capabilities needed to provide wholesale telecoms services to new and existing customers. This will help fully exploit FTTP market opportunities and accelerate delivery of its objective to become the leading value-for-money fixed-line fibre connectivity provider in the UK, Tosca said. This will require significant capital investment in systems, capabilities, marketing and customer service over the next 3-5 years, with TalkTalk directors confident that Toscafund will provide the necessary support.
