BSkyB-Tiscali Talks: Is Tiscali Asking Too Much?

BSkyB (NYSE: BSY) has given us a “no comment” to reports it’s pulling back in the running for Tiscali’s UK ISP business. says talks have “stalled”. Tiscali had wanted £600 million for the outfit, though Sky, which already owns Easynet, reportedly came in with a £450 million bid and is now said to be put off that by the company’s recent performance.

£600 million certainly sounds a lot for Tiscali, especially now that growth in broadband penetration is slowing – and Tiscali’s own customer base shrank by 37,000 between July and September, as El Reg says. Sky has been making big capex spends in its own broadband infrastructure (£162 million between June ’07 and ’08) and would have to make similar investments in integrating Tiscali’s Video Networks and Pipex acquisitions. If Tiscali asks too much, Sky well decide it’s cheaper to carry on ploughing its own furrow. With Vodafone (NYSE: VOD) and Carphone Warehouse thought to have got cold over Tiscali’s asking price, the number of suitors could be drying up.