Freedom4 Group is embarking upon the acquisition trail and plans to build an independent powerhouse to take on rival telecoms giant BT, say sources close to the situation.
The firm's shares were suspended from trading on AIM on 4 June after confirming it was "in talks regarding the possible acquisition of two businesses which may or may not lead to a transaction which might constitute a reverse takeover".
According to newspaper reports, Freedom4, formerly known as Pipex, will take over Daisy Communications, a Yorkshire-based firm which provides Internet, mobile and fixed-line services as well as utilities.
Under the deal Daisy Comms chief executive Matt Riley will sell part of his stake in the business for around £30m and will maintain a 25% share of the combined organisation, which will be rebranded as Daisy.
The paper quoted Riley as stating that the credit crunch had provided opportunities to target businesses with lower valuations and appeal to cost conscious users: "We want to be the alternative to BT," he said.
It is understood that Daisy Comms is very close to floating on AIM in a £200m deal and will use the funds, alongside a placing to fuel a spate of acquisitions in the group, with Eurotel believed to be the first.
Peter Dubens, Freedom4 chairman and owner of Oakley Capital - which took Pipex Business private in April 2008, rebranding it Vialtus - is looking to buy back the firm and bolt it onto the new look organisation that will turnover in excess £100m.
Since offloading its business arm and selling the consumer broadband customer base to Tiscali for £210m in 2007 - now part of Carphone Warehouse, Freedom4 has held a joint stake in WiMAX.
The service being developed with Intel has the potential to provide Internet access at speeds similar to or faster than broadband over a fixed phone line.