EU approves Carphone deal
TELECOMS and retail group Carphone Warehouse received approval from European Union antitrust authorities yesterday for its £236m takeover of Internet service provider Tiscali UK.
The European Commission, executive arm of the 27-nation European Union, said in a statement that the transaction would not impede competition.
It said that though Carphone Warehouse and Tiscali UK, a unit of Italy’s Tiscali, overlapped in retail and wholesale internet access provision as well as other services, the new entity would face competition from other strong players, especially BT.
“The Commission’s examination of the proposed transaction showed that none of the above markets would give rise to competition concerns,” the EU executive said.
The acquisition would make Carphone the biggest residential broadband provider in Britain, with 4.25m users.
It expects an immediate 10 per cent boost to its earnings per share for its fiscal year to March 2010 following the takeover.
Carphone – which was founded by entrepreneur Charles Dunstone – will fund the Tiscali UK buy, which excludes debt, from its existing facilities.
Tiscali has said it will use proceeds from the sale to restructure its debt.
Separately, Tiscali said its shareholders had approved a series of capital increases and a 1-for-10 reverse share split.
The capital increases comprise one for €190m (£162m) in shares with free warrants, a second increase for €46.5m in shares, and scope for the board to issue share capital for a further €25m.