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TalkTalk Nears Exclusive Talks with Octopus Investments Over Wholesale Unit Sale

By: IDCNOVARegion: Europe
UK broadband provider TalkTalk is reportedly close to entering exclusive negotiations with Octopus Investments over the sale of its wholesale network unit, PlatformX Communications (PXC), according to a report by Sky News. The potential deal could mark a significant step toward a full break-up of the company, which was founded by Sir Charles Dunstone in 2003.

The move comes after several previous attempts to divest the wholesale division failed. Australian investment firm Macquarie walked away from talks in 2024, according to media reports at the time. Sky News reported over the weekend that Octopus could secure exclusivity for "several weeks" while it finalizes financing for the transaction. The report also indicated that Octopus has fended off interest from private equity group Epiris.

Octopus Investments manages Fern Trading, a UK infrastructure investor. Its portfolio includes enterprise fiber network operator Vorboss, while its Fern Fibre Trading unit comprises fiber providers Jurassic, Swish, Giganet (including Cuckoo), and AllPoints Fibre. A deal with TalkTalk would expand Octopus's footprint in the UK wholesale telecom infrastructure market.

The potential sale is part of a broader restructuring at TalkTalk. Toscafund Asset Management, previously the company's second-largest shareholder, completed a £1.1 billion ($1.49 billion) takeover of TalkTalk in 2021. Two years later, the company announced a plan to split its business into three units: B2B Wholesale Platform, TalkTalk Consumer, and TalkTalk Business Direct. The latter was subsequently sold to TFP Telecoms Limited, a special purpose vehicle controlled by TalkTalk Telecom Group Limited's main shareholders.

TalkTalk's consumer arm, which serves approximately 1.8 million customers, has also attracted interest. Reports earlier this year suggested that Vodafone and Virgin Media O2 were exploring acquisitions of TalkTalk's consumer and wholesale units, with Opus Broadband also expressing interest, according to Sky News.

The news follows TalkTalk's sale of 120,000 broadband customers to altnet Rise Fibre last week. Financial terms of that transaction were not disclosed. TalkTalk declined to comment on the reports regarding the Octopus negotiations.

The potential divestment of the wholesale unit underscores the ongoing consolidation and restructuring within the UK telecommunications sector, as legacy operators seek to streamline operations and focus on core growth areas. For Octopus, the acquisition would bolster its position in the wholesale fiber market, aligning with its broader infrastructure investment strategy.