EU approves Carphone deal

City A.M. Reporter
TELECOMS and retail group Carphone Warehouse received approval from European Union antitrust authorities yesterday for its &pound;236m takeover of Internet service provider Tiscali UK.<br /><br />The European Commission, executive arm of the 27-nation European Union, said in a statement that the transaction would not impede competition.<br /><br />It said that though Carphone Warehouse and Tiscali UK, a unit of Italy&rsquo;s Tiscali, overlapped in retail and wholesale internet access provision as well as other services, the new entity would face competition from other strong players, especially BT.<br /><br />&ldquo;The Commission&rsquo;s examination of the proposed transaction showed that none of the above markets would give rise to competition concerns,&rdquo; the EU executive said.<br /><br />The acquisition would make Carphone the biggest residential broadband provider in Britain, with 4.25m users.<br /><br />It expects an immediate 10 per cent boost to its earnings per share for its fiscal year to March 2010 following the takeover.<br /><br />Carphone &ndash; which was founded by entrepreneur Charles Dunstone &ndash; will fund the Tiscali UK buy, which excludes debt, from its existing facilities.<br /><br />Tiscali has said it will use proceeds from the sale to restructure its debt.<br /><br />Separately, Tiscali said its shareholders had approved a series of capital increases and a 1-for-10 reverse share split.<br /><br />The capital increases comprise one for &euro;190m (&pound;162m) in shares with free warrants, a second increase for &euro;46.5m in shares, and scope for the board to issue share capital for a further &euro;25m.