Pipex broadband deal with carphone warehouse
April 9, 2007 by go broadband
Carphone Warehouse (owner of talktalk broadband and AOL broadband) is the last remaining company still interested in buying Pipex broadband. Pipex was being auctioned for £450m. But, BTbroadband BSkyB broadband and the UK’s largest internet provider, Virgin Media broadband have all pulled out of the race to buy Pipex, leaving The Carphone Warehouse as the sole bidder.
Charles Dunstone, Carphone’s chief executive, paid only £370m for AOL broadband’s UK operation in 2006 with its 1.5m broadband customers compared with Pipex’s 600,000 subscribers – a similar cost per customer would imply a price tag of only £148m for Pipex.
Pipex broadband shares fell by almost 8% last Monday after Financial Mail reported that Virgin Media broadband and BSkyB broadband had both pulled out of the auction. The broadband company’s shares closed last week at 153/ 4p, valuing the company at £377.5m.
BT broadband had been linked with an acquisition of Pipex broadband in the past, as had Orange and Sky. There has been significant consolidation activity in the broadband sector due to intense price competition.
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