Carphone Warehouse announces TalkTalk split

Carphone Warehouse, the UKÔÇÖs biggest mobile-phone retailer, has announced plans to separate its mobile phone business from its TalkTalk fixed line and broadband operations, creating two listed firms with Carphone founder Charles Dunstone set to be executive chairman for both. ┬á The separation would create two businesses with ÔÇ£distinct investment profiles and improved comparability with sector peers,ÔÇØ the company said in an e-mailed statement today. ┬á ÔÇ£We will get two separate companies which will appeal to different kinds of investors,ÔÇØ Chief Financial Officer Roger Taylor said in a phone interview today. The two companies will achieve a higher combined market value than the current structure, he said, declining to comment on the potential gain. ┬á The company had added a net 74,000 broadband connections in the first three months of 2009, and that the overall figure for net broadband connections comes from a 97,000 increase by TalkTalk and a 23,000 fall from its AOL Broadband business in the UK. ┬á "The macro environment will undoubtedly present challenges in the year ahead but at this stage we are not seeing it deteriorate further," said chief executive Charles Dunstone. ┬á "We are well funded, and have clear and simple strategies for our two businesses which balance growth with tight operational efficiency and cash generation." ┬á Taylor said he canÔÇÖt predict when the split will happen, although he ÔÇ£hopesÔÇØ to outline a more precise timetable at the annual shareholder meeting in July. He said heÔÇÖs confident in finding a solution on the allocation of debt between the units as ÔÇ£the situation of banks and the finance industry seems to be improving and getting more stable.ÔÇØ ┬á The board is reviewing options for the most appropriate allocation of existing debt and ÔÇ£expects to make further progress in this regard in the coming months.ÔÇØ