The Carphone Warehouse has issued a new Trading Update confirming that TalkTalk ( AOL UK , Opal , Tiscali , OneTel etc. ), it's UK broadband ISP division, will be completely demerged by July 2010 at the latest. The move is nothing new and has been expected ever since Best Buy USA brought a stake in the group.
Charles Dunstone, CEO, said: "It's been increasingly obvious that the Group is now two businesses - Best Buy Europe and TalkTalk Group. The one grew out of the other; but both have now reached the stage where there are no material synergies between them and where, for operational and competitive reasons, they need to operate independently. The businesses are effectively run as separate entities already, each with highly experienced and strong management teams.
The logic to demerge the two businesses and to give each shareholder a proportional direct interest in both is therefore clear. We have undertaken the necessary planning work to confirm our view that this is in shareholders' interests and to determine the practicable way of achieving the demerger. We are now close to finalising separate banking facilities for Best Buy Europe, which enables us to be confident of completing our demerger process at the latest by July 2010.
At that time, we intend both businesses to be listed as independent publicly-quoted companies. I am confident this will make it easier for shareholders to assess more clearly the value of the Group's businesses and that each business will continue to thrive, each with its distinct management strategy, investment characteristics, financing arrangements and potential."
TalkTalk currently serves over 3.9m fixed line consumers, comprising 2.8m broadband and 1.1m voice-only and narrowband customers. It is the number three player in the UK broadband market and should become the 2nd largest overall, just behind BT, after Tiscali UK's acquisition is completed this month.
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