nexfibre shareholders have launched a fresh attack on the Competition and Markets Authority's provisional findings into the company's proposed £2bn takeover of broadband provider Netomnia.

The proposed transaction would see nexfibre acquire Substantial Group, with its retail operations subsequently sold to Virgin Media O2 (VMO2) for £150m.

In a statement on Tuesday, nexfibre's owners, InfraVia, Liberty Global and Telefónica, described the CMA's interim report as "fundamentally flawed" and accused the watchdog of relying on assumptions that fail to reflect the commercial realities facing the UK's broadband sector.

At the heart of the dispute is the regulator's provisional conclusion that the acquisition of Substantial Group, owner of Netomnia, YouFibre and brsk, could substantially lessen competition in the wholesale broadband market. The CMA has argued that alternative outcomes, including a potential acquisition of Netomnia by rival CityFibre, could preserve stronger competition if the deal does not proceed.

nexfibre's shareholders have rejected that analysis outright, arguing that assumptions around a CityFibre takeover are not credible and that the CMA has underestimated the importance of the billions of pounds of investment tied to the transaction. They also pointed to recent market developments, including BT's acquisition of TalkTalk and questions surrounding CityFibre's finances, as evidence that the regulator's assessment is increasingly detached from current market conditions.

In a significant escalation, the investors confirmed they will not submit a remedies package to address the CMA's concerns. In merger investigations, companies typically offer concessions or commitments in an attempt to secure approval. However, nexfibre's backers argued there is no meaningful remedy for what they believe is a flawed regulatory framework.

The partners said: "We engaged in good faith on potential remedies, including commitments on investment and wholesale access. But there is no remedies package that can address the CMA’s current counterfactuals, and on that basis we have not submitted one."

They added: “We remain ready to engage constructively with CMA once the counterfactuals reflect the reality of the market."

The intervention raises the stakes for one of the UK's most closely watched telecoms deal, setting the stage for a high-stakes regulatory showdown over the future shape of the UK's fibre market. Supporters of the transaction argue it would unlock around £3.5bn of investment and help create a scaled challenger to Openreach, while critics warn it could reduce competition in the fast-consolidating alternative network sector.

The CMA is expected to reach its final decision in December.

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