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Telefónica hikes Net IPO
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November 12, 1999: 7:51 a.m. ET
Terra Networks set for $2B market value; largest listed European Net company
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LONDON (CNNfn) - Terra Networks, Spain's largest Internet service provider (ISP), increased the price range of its planned initial offering Friday, and could become Europe's largest Internet stock with a market value of more than $2 billion.
Terra is being spun off by the country's dominant telecom player, Telefónica, at a time when buoyancy appears to have returned to the European technology IPO sector.
Telefónica is selling up to 23.6 percent of Terra, with the retail tranche priced at 11.81 euros a share. The institutional price range has been raised from 10.12 to 11.81 euros to between 12 and 13 euros.
Telefónica said that institutional demand has been strong ahead of the book-building process, with the offer raising up to 440 million euros ($458 million) if priced at the top of the range. This would value the whole company at 1.8 billion euros, ahead of Britain's Freeserve (FREV), which floated in July.
Though shares in Freeserve, the U.K.'s largest ISP, soared 40 percent on their debut, they fell back to below the offer price before staging a recent recovery.
Shares in Tiscali, the Italian ISP which floated last month, climbed 50 percent on their first day of trade and have remained strong.
The pricing of the Italian and Spanish deals values subscribers at around 2,000 euros each, more than three times that placed on Freeserve subscribers.
Terra already has almost 900,000 subscribers in its home market and is expanding rapidly through acquisition in Latin America, where Web usage remains low but is growing quickly.
Terra lost 72.2 million euros in the first half of 1999 and has warned that it will not break even for three years.
The shares are due to list on the Madrid bourse on Nov. 17. 
-- from staff and wire reports
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