Kingfisher, Europ@Web Sell Liberty Surf to Tiscali
Page 1 of 1
[London, ENGLAND] U.K. stores group Kingfisher plc and France's Europ@Web have agreed to sell their shares in Liberty Surf Group to Tiscali SpA in a deal that values the French ISP at US $640 million, it was announced Monday.
James Kinsella, acting chief executive of Tiscali, said the acquisition reinforces Tiscali's leadership position in the market, making it the largest independent Internet Service Provider in Europe.
Last month, Tiscali completed a US $4 billion acquisition of World Online, another pan-European ISP business with operations in Germany, the U.K., and Spain. Now, with Liberty Surf and its 0.7 million subscribers across Europe, Tiscali is in an even stronger position to offer bigger deals to its advertisers.
Kingfisher, owner of the Woolworths stores in the U.K., will be selling its 35 percent stake in Liberty Surf via its Dutch subsidiary Eijsvogel for US $220 million.
"With the European ISP market now consolidating, today's deal enables us to realize this value created for our shareholders," commented Kingfisher Chief Executive Geoffrey Mulcahy.
According to newspaper reports in France, Liberty Surf was planning to withdraw from markets in the U.K., Sweden and Spain in order to reduce its spending. This option will now be under review at Tiscali, but it seems inevitable that some rationalization will occur.
Sketchy information about the sale of Liberty Surf emerged on Friday, after which shares in both Tiscali and Liberty Surf were suspended. The parties to the deal issued full information at a press conference on Monday.
The latest acquisition is another step in the ongoing consolidation of Europe's ISP industry. Liberty Surf itself was on the acquisition trail last year and purchased U.K. ISP X-Stream at the beginning of 2000. But the venture has not been a huge success, falling victim to the unmetered access fiasco that adversely affected many operators.
The other major move to European ISP consolidation came in December 2000 when France Telecom-controlled ISP Wanadoo agreed to purchase Freeserve, the largest Internet service provider in the U.K. Soon there will be a battle of the giants, and hopefully some much-needed improvements in services for the consumer.