RealTime IT News

World Online Confirms Merger Talks

[London, ENGLAND] European Internet service provider World Online confirmed late Monday that it is holding merger talks with Italy's Tiscali S.p.A.

Rumors of the talks caused an 11 percent hike in World Online shares Monday, while confirmation of them caused a further 8 percent rise on Tuesday.

However, the company warned that the discussions were still at an early stage, and that it was also considering potential link-ups with other major firms.

"Discussions with Tiscali are exploratory in nature and therefore we cannot anticipate whether these discussions will lead to agreement on future co-operation," said World Online in a statement issued in response to the press speculation.

Tiscali is a pan-European telecommunications and Internet services company, founded by Renato Soru in January 1998. It started modestly by providing regional telephone and Internet services in Cagliari before becoming a national and international operator.

Following the June appointment of former MSNBC.com Chief Executive James Kinsella as chairman, World Online appears to have consolidated its position and is pursuing an entirely new growth strategy. It recently announced that it would concentrate on improving its network infrastructure in order to provide a top-quality pan-European IP distribution system.

Tiscali, through its subsidiary Nets S.A., has been investing over US $130 million in building a high speed pan-European fiber-optic backbone network to link European cities. Its Northern Loop, linking cities in Germany and Benelux, is scheduled for completion in mid-2000, while the Southern Loop connecting cities in Spain, France, Switzerland and Italy, is expected to be complete by the end of 2001.