[London, ENGLAND] Wanadoo, the Internet arm of France
Telecom, announced Wednesday a bid for the entire share
capital of Freeserve, the largest Internet service provider
in the U.K.
The acquisition values Freeserve at £1,651 million
(US $2,360 million), a premium of around 11.2 percent
on the closing price Tuesday.
If the offer becomes unconditional in all respects,
up to 236.4 million new Wanadoo shares will be issued.
The current offer is made on the basis of 0.225 of a new
Wanadoo share for each Freeserve share held.
Electrical retailer Dixons, which originated Freeserve
and held 80 percent of the equity after spinning off
the ISP, will become the second largest shareholder
in Wanadoo with a 12.7 percent stake in the enlarged group.
Dixons’ directors have accepted the offer, which will
now go before a shareholder meeting to be held on January
11, 2001.
Nicolas Dufourcq, chief executive of Wanadoo, said the
acquisition was a tremendous step forward for Wanadoo’s
international growth strategy, making the company the
number one ISP provider in two of Europe’s top three
e-economies.
“The combination of the two management teams will bring
significant benefits to the customers of both companies
as well as added value to our shareholders,” said Dufourcq.
Dufourcq added that the transaction will also benefit
France Telecom, Wanadoo’s parent company which has
ambitions to become one of Europe’s Internet leaders.
Freeserve Chief Executive John Pluthero commented that
the additional resources of a large international group
and a continued relationship with Dixons would create
new opportunities and accelerate the development of
Freeserve’s core business.
Pluthero will join Wanadoo’s executive committee
once the acquisition is finalized.
Wanadoo currently has around 1.8 million users, and will
more than double its base with the addition of Freeserve’s
2 million subscribers.