TalkTalk, the telecoms and broadband group, has struck a £175m deal to offload part of its business-to-business (B2B) customer base to Daisy Group, a privately owned rival.
Sky News has learnt that TalkTalk will unveil the transaction on Thursday, alongside annual results that are expected to show a sharp fall in profits after a difficult year for the company.
Sources said the deal with Daisy consisted of TalkTalk’s roughly 80,000 business customers with which it has a direct billing relationship.
The vast majority of TalkTalk’s B2B arm by revenues and number of customers will be unaffected by the move, which is said to be aimed at continuing the company’s efforts to simplify itself.
Led by founder Charles Dunstone, who returned to an executive role last year, TalkTalk has been drawn into a price war with broadband and telecoms rivals such as BT Group and Sky, the owner of Sky News.
Investors – the largest of whom is Sir Charles – have had to swallow cuts to the dividend and a £200m share sale announced earlier this year.
TalkTalk is forecast by analysts to have made just £50m in pre-tax profit in the year to March, down from £161m the previous year.
Its shares are down by a third during the last 12 months, giving it a market capitalisation of just £1.4bn.
The deal to be announced on Thursday is also significant for Daisy, the owners of which have been conducting an auction for several months.
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One insider said the transaction with TalkTalk had been highlighted to prospective bidders for Daisy as an important ingredient in its future growth.
A TalkTalk spokesman declined to comment.
Source: Sky