Carphone Warehouse in talks to demerge TalkTalk broadband business
News that Carphone Warehouse is in discussions with bankers regarding the potential demerge of the company's TalkTalk broadband business has surprised many in the market due in the main to the timing. The broadband business itself is expected to bring in around £300 million this year and is currently in the top three in the UK broadband sector.
Already we are seeing talk that BSkyB and Vodafone may well be interested in acquiring the business with a price of up to £1 billion suggested in the marketplace. Quite why Carphone Warehouse is looking to demerge the business at this point in the economic cycle is uncertain but there is no doubt that the UK broadband sector is getting more and more competitive. Carphone Warehouse recently acquired the AOL broadband operation and successfully incorporated this into its existing business.
If the company is able to demand a price approaching £1 billion this will result in a substantial return on the company's investment over the last few years. Many believed that Carphone Warehouse would struggle in the mobile and broadband markets but this has not been the case and the company continues to go from strength to strength.
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