Operators in talks to acquire Phones 4U

Two of the mobile operators that contributed to the demise of Phones 4U by withdrawing their business in the past few weeks are in talks with the administrator to buy parts of the company.

EE and Vodafone have each spoken separately to the administrator about acquiring elements of Phone 4U's business, including some of the stores, staff and stock across the UK.

The moves could offer an escape route for thousands of staff who were set to lose their jobs in the largest retail collapse since the demise of Comet in 2012.

Dixons Carphone, the high street retailer, is also in talks to offer the 800 staff that work in Phones 4U concessions alternative roles within its own stores, according to one person with knowledge of the situation. Dixons Carphone could also be interested in some of the stores and in acquiring the company's brands.

The person added that Dixons Carphone had agreed a waiver with the administrator allowing them to talk directly to the staff, which had previously been prevented by a "no-poaching" agreement.

PwC was appointed as administrator by Phones 4u owner BC Partners after the company lost major contracts with EE and Vodafone. Some 550 stores and 6,000 jobs are at risk.

One person close to the situation said that EE could buy anywhere between "a handful" and 80 of the stores, which would also save the jobs of the employees of those outlets.

A Vodafone spokesman said: "We can confirm that we have been approached by the administrators of the Phones4U business. We will not be commenting on the detail of those discussions."

Rob Hunt, one of three joint administrators at PwC, declined to comment on the identity of the companies in talks to acquire parts of Phones 4U. He confirmed talks with three parties, however, to acquire "a combination of a proportion of stores, the people and some of the stock".

Mr Hunt said that staff would be told today that money had been secured to cover wages for another day. PwC will keep the business "mothballed" until tomorrow, he added, as there was not the ability to continue to trade the stores. A decision would be taken tomorrow about whether to continue for another 24 hours.

He said that there was also interest in buying the Phones 4U brand, either to keep it running or else to kill it off, while there was also talk about acquiring the 160 outlets that sit inside Dixons as a concession.

EE and Vodafone had briefly considered a takeover of Phones4U earlier this year, after being approached by the management, but did not proceed with the talks.

Executives at the operators insist that they are blameless in the demise of Phones 4U given their long-stated plans to pursue their own retail strategies.

One person familiar with the negotiations at EE said that terms being offered by Phones 4U were simply not attractive. Vodafone has blamed financial constraints imposed by BC Partners, which withdrew £200m from the group as a special dividend by adding debt to its balance sheet.

However, BC Partners has blamed the operators themselves for withdrawing from the chain, with founder John Caudwell adding to the criticism. He has called on the regulator to look at whether the operators had acted together to withdraw their business and cause the business to fail.

The argument turned increasingly heated this week, after it emerged that EE switched off the corporate network services that it provides to Phones 4U on Monday afternoon - although executives at the telecoms operator insist the move was accidental. Service was restored after Phones 4U management complained.

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