Pipex Communications, the UK's fifth-largest internet service provider, could be set for a £400m sale after the company confirmed it has appointed investment bank UBS to explore a sale of the business. 

Speculation that the company could soon be sold began in January when chairman Peter Dubens revealed he was “reviewing the best way forward for the business”. The company was also rumoured to be in talks with BT over a possible takeover towards the end of 2006.

Dubens is thought to be looking for offers of between 16 and 22 pence per share for the London-listed company, which has a stock market valuation of around £336m.

The sale of Pipex is likely to attract the interest of the major players in the UK broadband market, with Carphone Warehouse, Orange and Sky all tipped as likely bidders.

One of the UK's first internet service providers, Pipex has over 560,000 residential and small business customers for its broadband business, as well as web hosting and network services. The company also operates the Bulldog, Freedom2Surf and Nildram brands, and offers call packages through its Homecall operation. Turnover last year was £133m.