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Telecom feeding frenzy
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January 19, 1999: 8:57 a.m. ET
Network operator Energis soars as more shares hit market, could join FTSE
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LONDON (CNNfn) - London investors' frenzy for telecom stocks was fed further after utility National Grid said Tuesday it will offload more shares in Energis, its listed telecom subsidiary.
Energis (EGS) shares rocketed 17 percent higher to 1,790 pence on the news as analysts said the stock would now be able to enter the FTSE blue-chip index, boosting buying by index-tracking funds.
Energis has been one of the hottest stocks on the market since it went public in Dec.1997 at 290 pence per share.
"There's a slice of takeover speculation in there now," according to Alan Lyons, telecom analyst at ABN Amro in London. Selling stock worth some 1.1 billion pounds ($1.8 billion) will take National Grid's holding in Energis below 50 percent for the first time.
Shares such as Energis and rival Colt Telecom (CTM) - majority-owned by Fidelity of the U.S. - have become the hottest stocks on the London exchange over the past year. Surging Internet traffic and the growing use of corporate data communications has fueled stock market demand for companies which can offer high capacity networks.
Energis has also benefited as the Internet access provider for Freeserve, the phenomenally successful U.K. service run by electrical retailer Dixons (DXNS). Freeserve has notched up close to 1 million subscribers in its first four months.
"Freeserve should provide revenues of about 100 pounds a year per customer for Energis," estimates ABN Amro's Lyons.
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Energis
Colt Telecom
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