Pipex sale under threat - BT pulls out

Thisismoney.co.uk reports that the £450m auction for UK ISP Pipex may have hit a roadblock after BT ended its interest in the provider. It's also claimed that The Carphone Warehouse, which is possibly the only interested group still left in the process, has balked at the asking price: BT followed BSkyB and the country's largest Internet provider, Virgin Media, last week in quitting the auction, leaving The Carphone Warehouse as the sole bidder. Sources close to the negotiations told Financial Mail that The Carphone Warehouse had tabled a 'low ball' offer. Charles Dunstone, Carphone's chief executive, paid only £370m for AOL's UK operation in 2006 with its 1.5m broadband customers compared with Pipex's 600,000 subscribers. A similar rate per customer would imply a price tag of only £148m for Pipex. No doubt Pipex's existing subscribers will be less than enthralled at the prospect of Carphone Warehouse taking over their ISP, especially when CW still has its own issues still to resolve. This is all provided Pipex could even stomach such a deal, which would greatly depend upon the details. Naturally nobody is commenting. Source: ISP Review

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