UK telco TalkTalk has asked regulators for an extension on its takeover negotations as it mulls a £1.1bn offer from Toscafund Asset Management.
News of the acquisition offer broke early last month, and TalkTalk had a deadline of 5 November to either accept or reject the proposal. Following the approval of the Panel on Takeovers and Mergers, that deadline was today extended to 3 December. Any further extensions will require the panel's consent.
A source with information on the deal said extensions of this type are "pretty common", adding that the 28-day deadline was an improbably short amount of time to conclude a takeover arrangement given the ongoing disruption caused by the coronavirus pandemic.
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Commenting on the news, tech analyst firm Megabuyte stressed that such extensions are routine in takeovers. "We believe not too much should be read into an offer timetable extension, as this is a fairly common occurrence. Indeed, Toscafund's take private of Daisy in 2014 in association with founder Matt Riley was subject to three extensions before a formal bid was made."
TalkTalk declined to comment, and we have not heard back from Toscafund.
The deal will see shareholders offered 97 pence per unit of stock they own. This represents a 1.85 pence premium on the current trading price, and a 13.5 pence premium on the pre-offer price.
Alternatively, shareholders can opt to exchange their TalkTalk stock for a stake in the new private vehicle. El Reg was told that TalkTalk founder Sir Charles Dunstone intends to accept stock, affirming previous reports.
Dunstone rejected a earlier takeover offer from Toscafund – which already owns 30.5 per cent of TalkTalk – in 2019 which saw each share in the company valued at 135 pence. Although this deal is lower, it comes at a challenging time for the telecoms industry, raising the prospect he may accept. ®