Telecoms group TalkTalk has entered the race to buy Tesco’s loss-making video streaming service Blinkbox.
Tesco chief executive Dave Lewis is thought to be keen to offload the business, which was among investments made by his predecessor Philip Clarke in a push, which included the launch of the Hudl tablet, to embrace the digital age.
The Blinkbox brand is an umbrella for a handful of companies acquired by Tesco over a three-year period: Blinkbox Entertainment, founded by former Channel 4 and Vodafone executives to rival Amazon’s LoveFilm and Netflix; digital book service Mobcast and music streaming service WE7.
Together the three businesses lost close to £25m last year, a performance that would be reflected in any deal’s value, according to the Financial Times which first reported the talks.
Earlier this month Vodafone was also mooted as a potential suitor and industry experts say the service’s value rests in its relationships with content providers. Telecoms groups are trying to increase the appeal of their broadband, landline and mobile packages. BT, for example, is thrashing out the terms of a deal that will see it swallow mobile phone network EE for £12.5bn.
Lewis has promised to update investors on his plans to turn round the retailer when it updates the City on Christmas trading next week. Investors would welcome the disposal of a small business that is viewed as a distraction but are more concerned about how he will strengthen the company’s fragile balance sheet which could involve selling or spinning off bigger assets such as its Asian hypermarket chains or Clubcard operator Dunnhumby. Tesco declined to comment.
