UK's Virgin Media O2 in talks to buy TalkTalk - report

LONDON (Reuters) -Virgin Media O2, the British broadband and mobile company owned by Liberty Global and Telefonica, 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'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)

(Reporting by Paul Sandle, Editing by Louise Heavens)