BSkyB is understood to have tabled a £450m indicative bid for broadband company Tiscali’s UK business. The move leaves the satellite company in exclusive talks to acquire Tiscali after rival bidder Carphone Warehouse walked away from the auction.
A deal would see Sky overtake Carphone Warehouse as Britain’s third-largest broadband supplier with 3.6m customers, behind BT’s 4.5 million customers and Virgin Media’s 3.8 million customers. Currently Sky, which has 1.79 million broadband customers, only offers broadband to subscribers of its TV package.
Italian-owned Tiscali has been seeking a buyer since it launched a strategic review in February, but it has seen its valuation drop amid growing economic uncertainty.
Mobile company Vodafone is thought to have considered a £1.26bn bid for the company over the summer – including Tiscali’s Italian operations – but has since decided against the move.
Tiscali has around 1.2 million broadband users in the UK and is the fourth largest player, although it is believed to have lost market share recently.
BSkyB was not immediately available for comment.