News

Pipex honeymoon with the City financiers collapses - unkind gossips blamed

Reports over the Easter break said the sale of ISP Pipex was near collapse, with only Carphone Warehouse still interested.

Earlier noises from the bidding process, which was being run by bankers UBS, suggested a four-way tussle between Carphone Warehouse, BT, Virgin Media, and Sky could have fetch a strong price for the struggling outfit.

The Mail on Sunday reported this weekend, however, that Carphone Warehouse had felt able to table a "low ball" offer for Pipex, which has seen like-for-like subscriber numbers tumble. Carphone Warehouse CEO Charles Dunstone has sat on the Mail's board of directors since 2001.

Pipex chairman Peter Dubens is reportedly keen to sell, but a single bidder might mean he'll hold out this time. The news will do little to pacify Pipex's subscribers, who have endured weeks of uncertainty over a potential deal. Similar customer base sell offs, including to Orange and Carphone Warehouse itself, have caused chaos for users.

Dunstone issued a profits warning last week, so only a bargain buy would be acceptable to his investors. Swallowing Pipex would take its list to more than 2.8 million and put the company in the broadband premier league with BT and Virgin Media.

None of the players in the Pipex sell-off have yet put their name to any public comment.

Guy Kewney writes:

Realistically, Pipex was never up for sale on the basis of its Internet services which are at best, no better than any rival's. The absurd over-valuation of this ISP was always based on its projected earnings in the WiMAX market, where it acquired significant spectrum.

The dream of huge bonanza payouts from wireless broadband is fading, however, and all Pipex's baby-kissing last year, taking parties of journalists around the country to see WiMAX demonstrations, is now starting to be seen as politics in a lost cause.

 News copyright The Register