TalkTalk founder and Ares eye consumer arm as Opus deal stalls

The founder of TalkTalk and the broadband group's biggest lender are exploring a move to take control of its consumer-facing operations after discussions with an external bidder faltered.

Sky News has learnt that an exclusivity period granted to Opus Broadband to negotiate the acquisition of TalkTalk's retail arm expired earlier this week.

City sources said the exclusivity would not be extended but added that TalkTalk remained in contact with Opus, which had lined up the private equity firm Alchemy Partners to help fund a deal.

They said that a more likely outcome for the consumer division - which serves about 1.8 million customers - now appeared to be that Ares Management would assume long-term ownership of the business, with Sir Charles Dunstone playing a largely advisory role.

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Sir Charles, who launched TalkTalk in 2004 with an audacious attempt to capture a big share of Britain's retail telecoms market, is also said to be likely to chair the company.

One of the country's most successful entrepreneurs, the Carphone Warehouse co-founder remains a significant shareholder in TalkTalk alongside Toscafund Asset Management, with which he took it private in 2021.

It was unclear on Friday whether other potential buyers, which have included VodafoneThree, remain interested in pursuing a deal.

The discussions about TalkTalk's retail business are taking place in parallel to negotiations about the sale of its wholesale network, PXC, to Octopus Investments.

Those talks have been under way for several weeks, with Octopus recently granted an extension to its exclusivity period.

Binding agreements on the future of PXC and TalkTalk's consumer arm have yet to be struck, although advisers to the company are said to be keen to reach that point in the near term, and potentially as soon as next week.

The Telegraph reported on Thursday that Octopus and TalkTalk had issued a joint statement that they were "optimistic of delivering the proposed transaction".

Octopus's involvement in the PXC deal has led to the controversial freezing of investments in, and withdrawals from, an inheritance tax scheme run by the firm.

It has told investors in the scheme that it hopes to issue a further update next week.

While no firm decisions have been made about TalkTalk's break-up, several structuring options are said to be under consideration in order to expedite the changes of control of the two divisions.

If the Octopus deal with PXC is completed, it is likely to cost the buyer in the region of £300m, although sources cautioned that key details remained fluid.

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TalkTalk floated on the London Stock Exchange in 2010, when it demerged from Carphone Warehouse.

Its delisting took place at a valuation of about £2bn including debt.

The company has struggled for long periods since then, with cashflow difficulties - exacerbated by a haemorrhaging of its retail customer base - meaning the group's valuation has shrunk significantly over the last five years.

Over the last 18 months, its stakeholders, led by Ares, have stepped in repeatedly with new financial support to help stabilise the company.

Ares spearheaded a deal to inject a further £115m into the business, which is heavily debt-laden, as recently as February.

Bankers at PJT Partners are advising TalkTalk on the break-up discussions.

TalkTalk and Ares both declined to comment on Friday.

(c) Sky News 2026: TalkTalk founder and Ares eye consumer arm as Opus deal stalls