ONE of Britain’s fastest-growing telecoms groups is in talks to float on the stock market in a £200m deal that could be announced as soon as this week.

Daisy Communications, which provides corporate telecoms to small and medium-sized companies, plans to launch on the Alternative Investment Market at the same time as raising funds in a placing to give it the firepower for acquisitions.

The company won the Bank of Scotland’s Entrepreneur Challenge in 2007, which was run in association with The Sunday Times. As part of the prize, Matthew Riley, the chief executive, won a £5m interest-free loan and mentoring from retail tycoon Sir Philip Green, who is believed to have counselled him on this transaction.

Daisy is in talks to back into Freedom4 Group, the telecoms minnow previously known as Pipex. Also being injected into the business is Vialtus, Pipex’s former business telecoms arm.

The entire group is expected to be rebranded as Daisy, with Riley as chief executive. He will be left with roughly a 25% stake in the enlarged group and will take out up to £30m in cash.

It is understood that the company is already targeting the acquisition of a number of telecoms providers that have recently run into trouble. Daisy’s last deal was to strike a joint venture with Iceland Telecom’s UK arm.

Daisy was set up in 2001 by Riley, a former salesman for Deutsche Telekom in Leeds. Beginning with three employees, he spotted an opportunity to take advantage of the deregulation in the telecoms market.

Since then, he has pulled off 23 deals as Lancashire-based Daisy tries to scale up and compete with BT, which commands 60% of the market for supplying small and medium-sized companies. Annual turnover of the enlarged group will be more than £100m.

“The credit crunch is a huge opportunity for us,” Riley said in a recent interview. “People want to save money, which is what we do, and potential acquisitions are going to be cheaper. We want to be the alternative to BT in the business sector, the David to their Goliath.”

Freedom4’s shares have been suspended since June 4, when it confirmed it was in talks over a reverse takeover. The company is chaired by Peter Dubens, who built up Pipex before selling its customer base for £210m in 2007 to Tiscali, which is now part of Carphone Warehouse.

Freedom4 still owns a slice of WiMax radio spectrum, which promises internet access speeds similar to or faster than broadband over a fixed line. It is being developed in a joint venture with US microchip-maker Intel. Dubens made his first million selling heat-sensitive T-shirts and today backs Chelsea restaurateur Tom Aikens. He is expected to stay on as Daisy’s executive chairman. BT and mobile group 3 will this week step up their campaign to scrap the charges paid to mobile operators to connect callers to customers on their network.

The pair argue that so-called mobile termination rates are artificially high and cost British businesses more than £332m a year when calling a mobile from an office landline.

Separately, Tesco is hunting for a new partner for its broadband service after ending its relationship with Virgin Media. The supermarket, which has 180,000 broadband customers, will team up with either Carphone Warehouse or BT before an expected relaunch this year.

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