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Freeserve damps bid talk
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June 26, 2000: 4:40 a.m. ET
Britain's largest ISP says no immediate prospect of takeover by T-Online
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LONDON (CNNfn) - Freeserve PLC, Britain's largest Internet company, dashed investor hopes of a takeover bid Monday, prompting a plunge in its share price.
Dixons PLC, the electrical retailer that owns 80 percent of Freeserve, said in May that it would consider its strategic options regarding the future of its investment. That prompted speculation of a sale, with T-Online International AG, Europe's largest Internet service provider, cited by analysts as the most likely buyer.
However, Freeserve said Monday that although talks with a number of parties, including T-Online, were taking place, it does not expect that this process will lead in the near future to a bid for the whole of Freeserve."
Freeserve (FRE) shares crashed 11 percent to 386 pence on the statement, disappointing investors' hopes of a bid at a substantial premium. Freeserve has a market value of £3.9 billion ($5.9 billion).  Media reports had predicted T-Online would offer around £6 billion for the company. Dixons (DXNS) stock fell 9.3 percent to 257.5 pence.
T-Online undertook a successful initial public offering in April. The company, with a market value of  42 billion, has said it intends to make a series of acquisitions. Its shares rose almost 4 percent to 37.69 Monday morning.
Separately, Freeserve unveiled earnings for its fiscal fourth quarter, ended April 30, posting a 41 percent increase in revenue over the previous quarter to £7.3 million. It said its operating loss narrowed to £3.9 million from £4.3 million in the preceding three-month period.
The company had 1.93 million active registered accounts at the end of the fiscal year, up 6 percent from the end of the third quarter, and a 64 percent increase on the number at the end of the previous financial year. Freeserve pioneered subscription-free Internet access in Britain.
Freeserve listed on the London Stock Exchange last year in a blaze of publicity. Although the shares have had a rocky ride since their initial leap, the company has retained its place in the FTSE 100 index of blue-chip companies. 
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Freeserve
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