British multi-play provider TalkTalk has confirmed that it has received a preliminary and non-binding proposal from Toscafund Asset Management (TAM), working on behalf of funds advised by the latter, concerning a possible takeover bid. In a statement regarding the matter, TalkTalk said that TAM had advised it of a possible cash offer to be made by a newly formed company, for the entire issued and to be issued ordinary share capital of TalkTalk at a price of GBP0.97 (USD1.25) per share, ‘together with a full unlisted share alternative’. It is understood that such a deal would value TalkTalk at around GBP1.1 billion.
With the TalkTalk board having considered the terms of the proposal, it has reportedly agreed to progress talks with TAM. Meanwhile, it was noted that the proposal contains a number of pre-conditions to announcing any firm intention to make an offer, including that TAM receives an irrevocable undertaking from Sir Charles Dunstone, founder of TalkTalk and holder of just under 30% of the company’s shares, in support of the offer, including an election for any unlisted share alternative in respect of his entire holding of ordinary shares in the company.
In terms of next steps, TalkTalk simply noted: ‘A further announcement will be made as and when appropriate.’