BT has opened talks with UK government officials over a potential takeover bid for struggling rival TalkTalk, as the country's largest broadband provider prepares a late entrance into the auction for the heavily indebted company. Allison Kirkby, chief executive of the FTSE 100 telecoms group, met officials at the Department for Culture, Media and Sport to seek assurances that a takeover would not trigger an in-depth antitrust review, according to three people familiar with the matter.
BT is interested in buying TalkTalk's wholesale and retail businesses. Its broadband network Openreach, deemed by Ofcom to have significant market power, is TalkTalk's largest supplier, covering more than 30mn UK homes. People familiar with the auction said it had been held up partly by other bidders' concerns over fees payable to Openreach. BT is working with antitrust lawyers at Clifford Chance on the possible deal.
TalkTalk's owners, including founder Sir Charles Dunstone and private capital group Ares, have been seeking a buyer for months. The company was previously in exclusive talks to offload its wholesale business to Octopus Investments and its consumer operations to Opus Broadband, but neither party reached an agreement. Talks with several potential buyers are ongoing.
TalkTalk has struggled since it was taken private by Toscafund in a £1.1bn leveraged buyout in 2021. Its retail customer base has fallen from over 2.5mn in 2023 to about 1.6mn in May. Shareholders injected £235mn in December 2024 and a further £120mn in July last year. Ares pumped in another £115mn in March.
Source: Financial Times Companies · Summarized by HeadlinesBriefing