UK's TalkTalk scraps direct B2B sale to Daisy, knocking shares

(Adds details, share move, background)

June 29 (Reuters) - British broadband operator TalkTalk scrapped a plan to sell its direct business-to-business unit to Daisy Group on Friday, sparking a near 11 percent fall in its shares.

TalkTalk said in May it would sell its direct B2B unit to Daisy Group for 175 million pounds ($230 million) as part of an overhaul of its strategy to rebuild its customer base after a high-profile cyber attack in late 2015.

TalkTalk has prioritised customer growth above all else, and it recorded a record rise in numbers in its last quarter, but taking the group back to its value-for-money foundations has taken a toll on its profit.

As well as raising cash, it had said the sale of the unit, which would have seen the 80,000 business customers that it bills directly move to Daisy, would simplify its operations.

The company, which is led by chief executive officer Tristia Harrison, did not give a reason for its change of heart, saying it will continue to manage the direct B2B unit itself.

Shares (Berlin: DI6.BE - news) in London-based TalkTalk fell as much as 10.9 percent to their lowest since February this year.

TalkTalk said in a statement it was sticking to its forecast for earnings before interest, taxes, depreciation and amortization (EBITDA) for the current year. ($1 = 0.7605 pounds) (Reporting by Muvija M in Bengaluru; Editing by Bernard Orr and Alexander Smith)