BSkyB 'in Tiscali takeover talks'

Broadcasting giant BSkyB is today reportedly in exclusive talks with internet broadband provider Tiscali over a potential £450m (€572.7m) deal.

Sky is said to be in pole position for the group's UK business after Carphone Warehouse reportedly pulled out of the auction for Tiscali, which has been up for sale since it launched a strategic review in February.

Sky has put forward an indicative offer of £450m, according to The Sunday Times, which could boost the broadcaster's broadband offering to see it become the third biggest player in the market behind BT and Virgin Media.

Other competitors who are understood to have walked away from the long-running auction include Vodafone and BT.

Vodafone had been seen as a strong bidder earlier in the process, as the group was reportedly the only player interested in buying both Tiscali's UK and Italian broadband operations.

Groups interested in Tiscali's Italian operations are thought to include Wind, Italy's third biggest mobile operator, and Swisscom, which owns Italy's Fastweb.

Tiscali was at one stage expected to fetch about €1.6bn.

The provider has around 1.2 million broadband users in the UK and is the fourth largest player, although it is believed to have lost market share recently.

BSkyB was not immediately available for comment today.

It said on unveiling quarterly results last Friday that its broadband customer numbers had soared to 1.8 million, with one in five Sky customers taking up the service.

Its total customer numbers topped nine million after it added 87,000 new customers in the three months to September 30 in the group's best first-quarter performance for five years.