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Freeserve set for July offering
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June 28, 1999: 7:26 a.m. ET
Dixons to float 18.75% of top-ranked U.K. ISP in deal worth up to $720M
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LONDON (CNNfn) - British electronics retailer Dixons Group said Monday that it will offer 18.75 percent of the stock of its Internet service provider (ISP) subsidiary Freeserve in a deal worth up to 450 million pounds ($720 million).
The listing in London and on Nasdaq in New York is scheduled for July, and could set the benchmark for ISP pricing in Europe.
Dixons' stock has soared on the back of Freeserve's popularity as the company has transformed the British ISP market, gaining 1.25 million active members since its launch last September. The success of Freeserve has forced existing competitors such as AOL Europe to offer no-charge services, and encouraged a raft of other ISP start-ups to follow the same business model.
Dixons (DXNS) shares climbed 1.7 percent to 1,213 pence Monday, while its telecom partner Energis (EGS) was almost unchanged at 1,533 pence. Energis will take a 1.75 percent stake in Freeserve and can exercise an option for an additional 2 percent.
Dixons plans a U.K. retail offering backed by a global institutional offer, including U.S.-listed American Depositary Shares. The offer is being co-ordinated by CSFB and Cazenove.
The offer will include new and existing shares, though Dixons did not outline the split between the two. It also plans to introduce a new company structure after the listing.
Analysts have valued Freeserve at between 1.7 billion pounds and 2.4 billion pounds, giving a maximum initial valuation of around 1,920 pounds per subscriber.
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Dixons
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