Sky 'withdraws' from Tiscali buyout talks

Sky has reportedly pulled out of exclusive talks to buy Tiscali's UK operation.

Tiscali's Italian owners were unable to agree a price with Sky, according to the Guardian.

A Sky spokesman declined to comment this morning.

The UK's fifth largest ISP has been for sale since May, and saw its customer base shrink by 37,000 in the three months to the end of September while bankers attempted to cut a deal - first with Carphone Warehouse, then Vodafone, then Carphone Warehouse again, and then Sky.

All walked away over the £600m reportedly demanded by Tiscali for its approximately 1.77 million subscribers. Sky offered about £450m, according to reports.

A deal would have seen Sky leapfrog Carphone Warehosue to take third largest ISP spot, and represent a shortcut to offering broadband to customers who do not want satellite TV. Sky has mothballed its own "Picnic" standalone broadband product, alleging foot-dragging by Ofcom.

But for now it would seem Tiscali remains on the block. Any eventual acquirer faces the task of making sense of its many brands and systems, which include Homechoice, Pipex and Freedom2Surf. ®