Business telecoms group Daisy has decided not to buy TalkTalk Telecoms’s (TALK) direct business unit after completing due diligence alongside auditor Deloitte. Shares in the cash-strapped listed group, which had been hoping to net £175m from the sale, fell by as much as 11 per cent on the day of the announcement before a £560,000 share purchase by chairman and founder Charles Dunstone helped regain some losses.
But a vote of confidence from senior management has not convinced us that TalkTalk is primed for recovery. By contrast, we think it’s very concerning that acquisition-hungry Daisy decided not to follow through with its deal. TalkTalk’s debt position is looking increasingly fragile as it attempts to continue paying a dividend, while investing heavily in marketing and restructuring.
