The service provider is to split into three parts after the sale of the enterprise business
TalkTalk has sold its business unit to its own shareholders to improve the firm’s stability ahead of refinancing which is due in the New Year. The company is struggling with debts of £1.1 billion.
TalkTalk Business Direct has been sold to its shareholders using a special purpose (SPAC) vehicle, controlled by its main shareholders, for £95 million. Private equity firm Toscafund took TalkTalk private in a £1.1 billion deal in 2020. Sir Charles Dunstone, founded the company which was spun out from Carphone Warehouse and remains a major shareholder.
Failed attempts
There were failed attempts to sell the business division to parties including Sky and Daisy Group for as much as £150 million. The SPAC-enabled deal involves a wholesale contract with another TalkTalk unit, which should be worth £25 million over the next three years.
After this deal is completed, the plan is to break TalkTalk up into three parts – the business division, a wholesale arm and consumer unit – and sell them off or at least stakes in them. If the business division is sold in the next year, any proceeds above £95 million will go to the company.
The split means that each of the three divisions could be refinanced separately, which it is hoped, will increase their appeal.
CEO Tristia Harrison, who has been in the job since 2017, will lead a new transition board to oversee the split and step down next year, then become a member of the board of the wholesale division in March.
However, her predecessor, Dido Harding is the CEO for which TalkTalk is best remembered as she presided over a catastrophic data breach in early 2015. Up to 21,000 unique bank account numbers and sort codes were stolen. The company never recovered.