Freeserve Valuation Less Than Expected

Dixons’ Freeserve has
been valued at between £1.31 billion and £1.51 billion (US$2.05 billion and US$2.36 billion), well below
previous estimates of £2 billion to £4 billion (US$3.13 billion to US$6.25 billion) that were mentioned in the press.

Shares in the company will begin trading on the
London and Nasdaq stock markets beginning 26 July.

Only 18.25 percent of Freeserve is being offered for sale by Dixons,
although this is also more than had been forecast a few weeks ago.

Freeserve, which launched as a free access ISP in September 1998, became the top ISP in the UK within 11 weeks, and by May 1999
had achieved nearly 1.25 million active users. The average Freeserve user
logs on once a day, says the company.

The valuation will make Freeserve the largest home-grown Internet company
in Europe — and observers think that it will trigger a “gold rush”
phenomenon
seen previously only in the U.S.

There will be at least two more big flotations in the UK in 1999: auctioneer
QXL anticipates a flotation in September, while the financial services
company eXchange is expected to follow later.

Freeserve users who registered for shares before July 9 will be able to
make a minimum investment of £250 in the company. According to Dixons,
114,000 people applied for registration.

The biggest shareholder besides Dixons will be Energis, which will buy 3.75
percent of Freeserve over the next four years. Energis provides the
telecoms infrastructure for the ISP.