Investment company Toscafund could be set to take over TalkTalk in a deal valuing the company at £1.1 billion, a year after reportedly making a bid for around £400 million more.

TalkTalk said it was in discussions with the fund, run by Martin Hughes, over a 97p per share bid, and was planning to move ahead.

“The board has considered the terms of the proposal and has agreed to progress the proposal further with TAM (Toscafund Asset Management) along with taking advice from the company’s advisers,” it said in a statement to shareholders on Thursday morning.

But Mr Hughes, nicknamed “the Rottweiler” in the City of London, has asked for the backing of TalkTalk’s chairman, Sir Charles Dunstone, before he makes any firm bid.

Sir Charles, the Carphone Warehouse founder who launched TalkTalk in 2013, still holds a nearly 30% stake in TalkTalk, making him the firm’s biggest shareholder.

Toscafund is also a major investor and owns 29% of the company, according to data from Marketscreener.

Tosca also holds big stakes in Ted Baker and Stobart Group.

Its 97p per share bid would value TalkTalk at about £1.1 billion, though it would not pay this much as the investor already owns more than a quarter of the company.

In July Tosca confirmed to Sky News that it had made an offer for TalkTalk in 2019. It has since been upping its stake in the company.

In a statement to the broadcaster, Tosca said it “made an indicative offer of 135p to take TalkTalk private, but it fully understands the reasons behind the board rejecting the offer”.

The 135p offer would have valued the business at around £1.5 billion, but was rejected for not giving enough value to customers, Sky reported.