* TalkTalk recommends 97 pence-a-share offer
* Buyers say TalkTalk has a brighter future as a private
company
* Chairman Dunstone says will continue to be major
shareholder
(Adds details, quotes, shares)
By Paul Sandle
LONDON, Dec 17 (Reuters) - British broadband company
TalkTalk said on Thursday it has agreed a 1.1
billion-pound ($1.5 billion) takeover by shareholder Toscafund
and private-equity investor Penta.
The buyers said TalkTalk would be able to access more debt
and equity options as a private company and would not face the
regulatory burdens of being listed.
The value of the 97 pence-per-share agreed offer is
unchanged from a proposal from Toscafund, the second largest
shareholder in TalkTalk with a 29.5% stake, on Oct 8.
TalkTalk investors can receive cash or unlisted shares.
The deal has the backing of TalkTalk founder and chairman
Charles Dunstone, who owns nearly 30%. He said he was pleased to
have the opportunity to continue to be a major shareholder.
"As the UK transitions to full fibre we have a hugely
challenging, but exciting opportunity," he said.
"Being a private company would allow us to accelerate
adoption and focus on our role as the affordable provider of
fibre for businesses and consumers nationwide.
"The telecoms industry is going through a fundamental re-set
and we are keen to play our part in it."
TalkTalk provides broadband, fixed-line, TV and mobile
services to more than 4 million people.
In recent years it has sought to differentiate itself from
rivals such as BT, Virgin Media and Sky
, by returning to its foundations as a value-focused
provider.
Tosco-Penta said TalkTalk had performed resiliently through
the COVID-19 pandemic, which has underlined the vital importance
of broadband, but there had been a material decrease in its
share price.
TalkTalk's shares had fallen 28% from 116 pence at the start
of the year to 83 pence before the bid interest was made public
in October. They were trading up 2.7% at 100 pence in morning
deals on Thursday.
The recommended deal came as TalkTalk published it
first-half results, showing a 9 million pound hit from COVID-19.
Headline revenue fell 6.2% year-on-year to 717 million pounds,
it said, while headline core earnings were down 12.9% to 122
million pounds.
Chief Executive Tristia Harrison said: "Lockdown has taught
us that fast, reliable and affordable connectivity is more
important than ever, and we have seen excellent network
performance despite a 40%+ increase in data usage."
($1 = 0.7372 pounds)
(Reporting by Paul Sandle
Editing by William Schomberg and Susan Fenton)
