UK satellite broadcaster and growing broadband provider BSkyB appears to have pulled out of talks to acquire Tiscali UK, the Italian broadband provider.

Sky was reported to have offered £450m for Tiscali after rival Carphone Warehouse pulled out of the auction. Either Sky appears to have decided that its offer was overpriced in the current economic climate or Tiscali is holding out for a larger offer.

Tiscali apparently turned down better offers - seeking £600m for the business. Carphone Warehouse tried with £550m but were turned down.

If successful Sky would have become Britain's third-largest broadband supplier with 3.6m customers - ahead of Carphone Warehouse and close to TV rival Virgin Media (3.8 million subscribers). BT remains number one (4.5 million) by some margin.

Tiscali has been up for sale since May, with Carphone Warehouse and Vodafone both interested parties.

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