Broadband provider Tiscali has confirmed talks over selling its UK business to broadcasting giant BSkyB.
Tiscali currently has 1.8 million broadband customers in the UK – making it the fourth largest player – although its market share is believed to have come under recent pressure.
The Italian firm said: “Tiscali clarifies that it is currently holding talks with the BSkyB Group plc in relation to certain UK assets.”
The statement came after weekend reports of exclusive talks between the duo over a £450 million deal.
Tiscali has been up for sale since it launched a strategic review in February.
Sky put forward an indicative offer of £450 million, according to reports, which could make the broadcaster the third biggest player in the market behind BT and Virgin Media.
Carphone Warehouse is said to have pulled out of the bidding. Other competitors understood to have walked away from the auction include Vodafone and BT.
Vodafone had been seen as a strong bidder earlier in the process, as the group was reportedly the only player interested in buying both Tiscali’s UK and Italian broadband operations.
Groups interested in Tiscali’s Italian operations are thought to include Wind, Italy’s third biggest mobile operator, and Swisscom, which owns Italy’s Fastweb.
Tiscali was at one stage expected to fetch about €1.6 billion (£1.3bn), with the price tag for the UK business alone seen as being more than £500 million.
BSkyB said on unveiling quarterly results last Friday that its broadband customer numbers had soared to 1.8 million, with one in five Sky customers taking up the service. Its total customer numbers topped nine million after it added 87,000 new customers in the three months to September 30.