TalkTalk tanks as it pulls the plug on B2B business sale

Shares in TalkTalk tanked on Friday afternoon after the company said it had jointly agreed with Daisy Group not to go ahead with the sale its direct B2B business that was announced last month.

TalkTalk, which gave no reason for the decision, said it will continue to manage all direct B2B business, providing uninterrupted services for customers. It also reiterated its FY19 EBITDA guidance of 15% year-on-year growth from 2018's £233m.

"Daisy remains an important, long-term strategic partner for TalkTalk," the group said.

TalkTalk had announced on 24 May that it was selling its B2B business to Daisy for £175m. It said at the time that the sale, which was due to complete late next month, would further strengthen its balance sheet, allowing for the continued investment in sustainable growth and plans to build a new full fibre network to 3 million homes and businesses.

RBC Capital Markets said the deal is likely to have collapsed due to issues at Daisy rather than anything in the due diligence process.

Analyst Wilton Fry pointed to Daisy's announcement on Thursday that its chief executive since 2015, Neil Muller, would be leaving, with founder Matt Riley becoming executive chairman.

"The move follows several seemingly failed attempts to find a buyer for the £1bn business," Fry said.

At 1423 BST, the shares were down 6.8% to 100.40p, having taken a turn for the worse shortly after the announcement.