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Sky in talks to sell Easynet, claim insiders

Management buyout chatter

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Exclusive Sky has held talks to spin off its networking business Easynet, according to insiders.

Senior management at Easynet, which Sky bought for £211m in 2005, are planning a buyout, sources who spoke on condition of anonymity said.

Easynet's CEO David Rowe and chief planning and technology officer Justin Fielder are understood to have held meetings with Sky last week, and a deal is expected soon. Competing talks between Sky and Talk Talk are said to have broken down.

Easynet, founded in 1994, contributed £202.2m to Sky's overall revenues in 2008/09 of £5.3bn.

Sky would retain control of the network under a management buyout, while an independent Easynet would rent capacity from Sky's Network Services unit.

The infrastructure was used by Sky as a springboard for its successful leap into the home broadband market, and was the main target of its acquisition of Easynet. Since entering the fray Sky has continued Easynet's aggressive unbundling strategy, and is now the UK's fourth largest ISP with more than 2.5 million subscribers.

A Sky spokesman today declined to comment on what he called "market speculation". At time of publication Easynet had not returned a call requesting comment. ®

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