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Tiscali could fall to BSkyB

Alex Scroxton

Stock in Anglo-Italian internet provider Tiscali was temporarily suspended today after reports that the long-running saga over its future was close to resolution sent its shares soaring.

The bounce came after the Times reported that BSkyB - which is by utter coincidence 39% owned by the Times' parent News International - had entered into 'exclusive' talks with Tiscali, which has struggled to generate much interest since its Italian owners put out the for sale sign in May.

Over the summer, prospective suitors in the shape of Vodafone and Carphone Warehouse both walked away from a potential deal.

One source in the broadband industry who declined to be named said that from a certain perspective a deal between Sky and Tiscali could make sense. "We will see a degree of convergence between content providers and infrastructure providers," he predicted.

The Times valued the deal at approximately £450m, saying that Sky would add between 3 and 4 million subscribers to its customer base and leapfrog Carphone Warehouse to become the UK's third biggest broadband provider.

Note that BSkyB profits tumbled from £84m to £73m in the quarter ended 30 September, according to results released today.

Tiscali was unavailable for comment.

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