Contrary to the prior market belief, it seems that BSkyB isn’t interested in taking-over Tiscali’s struggling UK business anymore. Recently, Mario Rosso, CEO, Tiscali, had announced that serious negotiations were underway with a prominent ISP (Internet Service Provider) and an acquisition would be soon finalised. It was further revealed that BSkyB (i.e. Sky Broadband) was willing to takeover the UK-based broadband division of Tiscali.
However, now it seems that the deal will not go ahead, and it is believed that one major factor that has forced BSkyB to change its decision is the continuing downward trend in the global markets. Further, the declining value of the Sterling (GBP) has made the deal a difficult proposition for BSkyB. The news has only worsened things as the value of Tiscali’s shares crashed as the news of BSkyB’s refusal reached the stock market and they now lie suspended from trading. Things are bound to get difficult for Tiscali, as it was already struggling to maintain its position in the broadband market. It is largely believed that the broadband major doesn’t have anything substantial left in its portfolio to invite fresh investments in the near future something it badly needs.
Other competitors in the UK broadband market are sure to use this opportunity to poach Tiscali’s existing customersby offering cheaper and better broadband deals (more on broadband deals). Tiscali’s share in the market is set to decline as it searches for a solution to bail itself out of the current mess. Soon after the BSkyB debacle, Tiscali officials were heard commenting that they would re-negotiate with their current creditors to ensure that the company debt, which is pegged at £458 million, is somehow diluted.
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