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TalkTalk shaves another £15m off Tiscali price
04 Aug 2010 | 16.39 Europe/London
TalkTalk has announced that, a year on, it has shaved £15m off the price it paid for Tiscali.
In fact, TalkTalk has shaved £21m off the £236m it paid for the ISP last May but this has been revised to £15m due to a ‘working capital adjustment’ of £6m.
It basically means that Tiscali had overvalued itself. Observers believe this is likely to have been caused by churn which the ISP was suffering anyway and was exacerbated when the company was being courted by rival suitors TalkTalk and Sky. In fact, TalkTalk even set up a special page on its web site encouraging Tiscali subscribers to put an end to the confusion over who was going to own the ISP by converting to them.
The reduction is significant because it means that at £221m TalkTalk ended up paying less than half the £450m it is believed to have originally offered Tiscali back in 2008. Sky, which did not hide its ambition to bid for Tiscali, was also believed to have offered a similar figure. However, at the time the ISP believed it was worth more, and could hold out for improved offers. Some estimates at the time suggested the company was claiming a fee between £550m to £600m would have been appropriate.
In fact, TalkTalk has shaved £21m off the £236m it paid for the ISP last May but this has been revised to £15m due to a ‘working capital adjustment’ of £6m.
It basically means that Tiscali had overvalued itself. Observers believe this is likely to have been caused by churn which the ISP was suffering anyway and was exacerbated when the company was being courted by rival suitors TalkTalk and Sky. In fact, TalkTalk even set up a special page on its web site encouraging Tiscali subscribers to put an end to the confusion over who was going to own the ISP by converting to them.
The reduction is significant because it means that at £221m TalkTalk ended up paying less than half the £450m it is believed to have originally offered Tiscali back in 2008. Sky, which did not hide its ambition to bid for Tiscali, was also believed to have offered a similar figure. However, at the time the ISP believed it was worth more, and could hold out for improved offers. Some estimates at the time suggested the company was claiming a fee between £550m to £600m would have been appropriate.