Australian bank linked with £450m investment in TalkTalk wholesale arm

Salford-based telecommunications group, TalkTalk, could be in line for an injection of up to £450m from Australian banking group, Macquarie.

The financial giant is keen to take a stake of at least 40% in the wholesale arm of the broadband provider, according to Sky News.

TalkTalk, founded by Sir Charles Dunstone, is undergoing a break-up after TalkTalk Business Direct (TTBD), the business and enterprise-focused connectivity provider, was acquired last October after shareholders, including Sir Charles, set up a special purpose vehicle to effect the £95m acquisition.

The sale was the first phase of a demerger strategy to create three separate businesses.

TalkTalk’s consumer arm is expected to be sold at a later date.

The group is heavily indebted. In 2020 private equity firm Toscafund took TalkTalk private in a £1.1bn deal.

It is understood that Macquarie could sign an exclusivity deal, paving the way to its investment, this week in the PlatformX wholesale arm.

Weekend speculation also suggested that Virgin 02 could bid for TTBD.

The proceeds from any funds would be used to pay down the debt.

Explaining the thinking behind the break-up, TalkTalk has said: “The separation will lead to the creation of three independent companies: the B2B Wholesale Platform, the leading and fastest growing provider of wholesale telecom services in the UK; TalkTalk Consumer – home to 2.4 million residential broadband customers and the only scale value player in the residential broadband market; and TalkTalk Business Direct, which serves the connectivity needs of approximately 90,000 small businesses.”

All three businesses will remain headquartered in Salford.

The group announced its intention to relocate from its London headquarters to Salford in November 2018, creating around 500 jobs.