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Freeserve shares boosted by sale expectations

Dixons, the electronics retail group, is considering the sale of its 80% stake in Freeserve, the ISP, to T-Online, the biggest ISP in Europe. T-Online is reported to be preparing a £6bn bid for the company.30 May 2000

Dixons, which earlier this month appointed the investment bank, Goldman Sachs to advise it on the disposal of part or all of its stake in Freeserve, said “it would be wrong to suppose that there was only one bidder.” It is thought that Telewest and NTL are also interested.

Dixons makes money with Freeserve through its e-commerce operations, on-line advertising and its share of telephone line charges. In addition, Dixons products are sold on the web site.

The report that T-Online was preparing a bid sent the shares in Freeserve soaring. Early trading today saw Freeserve’s shares rise by 108 pence or 27.6%.

Freeserve, the UK’s largest ISP, has 2 million subscribers. T-Online has 5 million, but it has yet to break into the English speaking market.