Carphone Warehouse has launched a £250 million bid to acquire the Italian broadband provider Tiscali, it has been revealed.
According to the Financial Times, the telecoms group has made an "informal offer" for the struggling internet service provider.
Sources familiar with the matter told the newspaper that an agreement could be concluded as early as this week, although there was still a possibility the deal could collapse.
Commenting on the potential acquisition, Michael Kovacocy, an analyst at Daiwa, told Reuters: "That sounds like a reasonable price and a reasonable 'haircut' given the original price last year and where the market and Tiscali have moved subsequently."
If Carphone Warehouse was to complete the purchase of Tiscali's assets, it would become the second largest broadband provider in the UK - second only to BT.
British Sky Broadcasting, Britain's fourth biggest broadband supplier, had shown strong interest in acquiring Tiscali last month before calling off negotiations following a disagreement on price.