Talktalk Telecom Group PLC (LON:TALK) has revealed it has received a bid approach from investment group Toscafund.
The offer values the telecoms firm at 97p per share, up from Wednesday’s closing price of 83.3p but less than a third of the share’s peak level in the mid-2010s.
READ: TalkTalk turned down takeover bid from major investor, report
There are certain pre-conditions before making a firm offer, including that Toscafund receives a binding agreement from Talktalk’s chairman Charles Dunstone in support of the offer.
Another pre-condition is the election for any unlisted share alternative in respect of Dunstone’s entire holding of ordinary shares in the company.
“Having been building in stake in TalkTalk in recent years Toscafund may have not unreasonably decided it could do a better job of managing the assets itself out of the glare of public markets,” said Russ Mould, investment director at AJ Bell.
“TalkTalk was always positioned as the cheaper alternative to the likes of BT, Sky and Virgin Media for broadband and other services but ultimately it struggled to gain traction in a highly competitive marketplace and growth has really stalled in recent years.”
The fact that the board has agreed to proceed with talks, said UBS, “could suggest Dunstone might be open to the offer”.
Shares shot up 17% to 97.4p on Thursday morning.