Gamma suitor Epiris in talks to buy TalkTalk wholesale arm PXC for £200m

The buyout firm stalking London-listed Gamma Communications has entered formal talks to buy PXC, the wholesale arm of struggling TalkTalk Telecom Group.

Sky News has learnt that Epiris is in detailed talks to acquire PXC following the collapse of exclusive discussions with Octopus Investments.

TalkTalk is racing to find buyers for its wholesale and consumer arms by the end of the month, with Opus Broadband having returned with a cut-price £100m offer for its retail division this week, Sky News revealed on Thursday.

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Sources said the talks with Epiris were expected to value PXC at somewhere in the region of £200m.

One option under consideration is for the PXC deal to be implemented by way of a pre-pack administration overseen by Alvarez & Marsal, according to people close to the process.

Total proceeds from the sale of its two divisions of roughly £300m would leave shareholders, bondholders and other lenders facing steep losses on their investments in one of Britain's biggest telecoms and broadband providers.

In a statement on Friday morning, TalkTalk confirmed that it was in advanced negotiations about the disposals.

"The company is now in the final stages of its sales process for the businesses and expects to conclude both transactions imminently," it said.

TalkTalk faces a deadline of the end of the month to expedite the disposals because of payments due to creditors, the largest of which is BT Group's Openreach arm.

It remains possible that BT could step in to take control of PXC, according to analysts.

Epiris is in the middle of a takeover bid for London-listed Gamma, with which analysts say the PXC business would share substantial financial synergies.

Meanwhile, TalkTalk's consumer business, which serves about 1.7 million customers, could be taken over by the group's biggest lender, Ares Management, if the Opus Broadband bid is not deemed acceptable.

TalkTalk's founder, Sir Charles Dunstone, is expected to chair the retail operation if Ares takes control of it.

Sir Charles launched TalkTalk in 2004 with an audacious attempt to capture a big share of Britain's retail telecoms market.

The Carphone Warehouse co-founder remains a significant shareholder in TalkTalk alongside Toscafund Asset Management, with which he took it private in 2021.

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

Its 2021 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.

TalkTalk and Epiris declined to comment.

(c) Sky News 2026: Gamma suitor Epiris in talks to buy TalkTalk wholesale arm PXC for £200m