
The Octopus Inheritance Tax Service (OITS), which is a discretionary investment service managed by Octopus Investments, has revealed that they’re going to split out their fibre broadband assets (i.e. those held by Fern Trading – Vorboss and AllPoints Fibre Network) from other investments. The move comes shortly after Octopus backed away from a deal to acquire PXC from TalkTalk.
The CEO of Octopus Investments, Erin Platts, told the Telegraph (paywall) that she wanted to be “honest about what hasn’t worked … and put OITS on a stronger footing for the future“, which is a reference to their recent poor performance and the questions that rose after OITS froze withdrawals while talks over a possible c.£200m deal with broadband group TalkTalk were ongoing.
At this point it’s already well known that Fern Trading’s fibre business has been struggling (APFN has burnt a lot of money on their own fibre assets), albeit not unlike plenty of other alternative network operators we could mention – due in part to wider market strains (competition, high interest rates and rising build costs).
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Under the change, a new fund will now house Fern’s full fibre network assets, which account for a little over a third of its value. The other fund will contain the rest of Fern’s assets. Two classes of shares will be created for this.
Octopus is also said to have faced growing scrutiny about transparency after it was reported by the same paper that savers had been bankrolling failed hospitals and care homes.
Erin Platts said:
“We know the last few years haven’t delivered the performance our investors expected and our investors have had enough uncertainty from the recent trading pause. Today, we’re drawing a line under that and giving them a clear way forward. We’re reopening the Octopus Inheritance Tax Service and splitting the shares of part of the fibre business, which has been the biggest drag on performance, from the wider Fern portfolio.
It’s a significant change but when something isn’t delivering for investors, you change it. Our responsibility is to be honest about what hasn’t worked, act on it, and put OITS on a stronger footing for the future.”
In theory, this will leave the non-fibre part of Fern Trading’s portfolio in a better place, while allowing their fibre business the flexibility to adopt a different strategy. But one aspect of this, which hasn’t been picked up on by the newspaper, is that not all of Fern’s fibre assets are in quite such a bad state, relatively speaking.
For example, Fern’s London-based business fibre network, under Vorboss, is healthier (if still far.. from ideal). But this is debatable and we suspect nobody would be surprised if Octopus eventually looked to find a more direct exit strategy for their entire fibre division (sale / consolidation or administration etc.).
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UPDATE 5th Oct 2026 @ 8:54am
Octopus Investments has been in contact to clarify how the split will work.
The split is:
Fern A will comprise the more established sectors of Fern’s portfolio, including Fern’s real estate businesses, lending, renewable energy assets and Fern’s Central London-focussed fibre business Vorboss. This results in a highly diversified portfolio backed by institutional-grade, cash-generative assets.
Fern B will be made up of Fern Fibre Trading Limited (FFTL), Fern’s retail fibre business and NetCo, Fern’s fibre network assets. In addition, it will also hold sufficient cash reserves so that it can continue to operate and potentially pursue growth opportunities, including the current potential transaction.
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CityFibre purchase of the physical fibre networks in 3, 2, 1…
I suspect they’ll now be busy paying more attention to Netomnia again.
Sure, but I imagine they’d never turn down the opportunity to buy physical network assets at a cut price, especially given that APFN’s tech already supports CityFibre so most customers will likely remain with the same retail ISP should such a purchase go ahead.
Hope so Ben, I’d give it some serious consideration if CF acquire APFN.
APFN hardly have any of their own infrastructure they’re mainly selling on other networks and by most accounts aren’t selling massive volumes yet. So, it probably isn’t top of a CityFibre acquisition list
But they still wont have the cash to buy …
So well argued on the anti competitive part to the CMA, but we all know the reality was that Nexfibre would basically suffocate CityFibre with the purchase. This gives them potential space but still without cash to buy.
I suspect Netomnia et all will have their own struggles if they are not acquired.
The CMA disagree with you
“CityFibre would likely have been able to raise the required funding for a valuation that was acceptable to Substantial’s shareholders.”
Wow, kettle of fish.
Are Octopus planning to make an APFN/Vorboss asset that could be picked up by VM as an alternative to Netomnia, once the CMA say no?
Or are they just hoping that a company, any company, will come forward and help them dispose of the loss-making boondoggle?
Or are there still plans to buy PXC, bolt it on and then either run or sell the resulting business?
Who knows?
Where was the business plan? At any point?
Perhaps installing someone with talent for the telecoms industry in a senior management position could have made a difference.
I do fear for the employees, customers and Vorboss now.
Splitting APFN from Vorboss leaves APFN as a very poor relation. Octopus strategy likely to offer all their fibre assets as a job lot. Octopus don’t want to be left with either a management distraction or investors to ask why they’ve been left with an expensive underperforming asset.
And FWIW can’t imagine how investors are going to be feeling when they look back at the valuation Octopus put on these assets just 18 months ago.
Not sure what’s special about Vorbos. On their last results they look like the usual financial basket case and Fern are only committed to fund them until end of April 27. I don’t expect the new ‘Bad Fern’ company to be putting any new investment into altnets.
Hah, the endless shuffles of Octopus Fibre stuff. The shuffles are part of the reason it’s such a mess. They’re clearly in the getting ready to offload and write off phase.