Of the 6.1 million registered subscribers, 3.5 million are
active users. The merger will form a pan-European internet network
company providing new telco, media and e-commerce services to the
largest pan-European customer base. The Combination will maintain
the Tiscali name and its headquarters in Italy. Renato Soru, the
founder of Tiscali, will be Executive Chairman with James Kinsella,
currently Chairman of World Online, becoming Chief Executive.
Tiscali believes the merger will mean cash savings of £330
million over the coming two years.
Shares in both companies rose in early trading today following
the announcement of the biggest consolidation in the European
internet market. However the offer price is less than half the
price investors paid when World Online floated in March. The
company has since had a troubled six months.
World Online floated on 17th March but the shares fell sharply
following allegations that founder Nina Brink sold two thirds of
her stake in the company in advance and at a fraction of the offer
price without declaring her sale. This led to the raising of a
class action on behalf of investors. Ms Brink was forced to
resign.
James Kinsella, Chairman of World Online, said of the deal:
"It is not an end in itself, but rather a
platform for further expansion as together we build Europe’s
leading internet network company… We are now well positioned to be
a winner in the consolidation of the European internet industry as
we move our company from an incumbent-dependent ISP to an
interconnected IP network operator."
