LONDON (Reuters) -Virgin Media O2, the British broadband and mobile company owned by Liberty Global (NASDAQ:LBTYA) and Telefonica (BME:TEF), is in talks to buy broadband rival TalkTalk, Sky News reported on Friday.
A Sky News report said Virgin Media 02 had submitted an indicative bid to buy the company for about 3 billion pounds ($3.56 billion).
TalkTalk, a challenger brand serving 4.2 million customers at the lower-priced end of the market, was taken private by shareholder Toscafund, private equity owner Penta and founder Charles Dunstone in a 1.8 billion pound deal including debt, deal in December 2020.
Virgin Media O2 has its own cable and fibre network, providing superfast broadband to nearly 6 million customers, and it vies with BT (LON:BT)'s EE at the top of the mobile market.
TalkTalk buys capacity on BT's Openreach network to provide its broadband services.
Shares in BT were trading down 7% after the report.
Lazard is advising Talktalk on a potential sale, while LionTree is advising Virgin Media O2, according to reports.
Virgin Media O2 and TalkTalk declined to comment.
($1 = 0.8432 pounds)