NTL tipped for Freeserve takeover

British cable telecom company NTL is the favourite to buy Britain's dominant Internet service provider Freeserve (quote: FRE), according to press reports Sunday.

The sale of Freeserve could see the company that revolutionised Internet access in Britain valued at a premium of around £3.9bn, according to the reports.

According to The Sunday Times, Dixons, which owns a majority stake in Freeserve, has appointed Goldman Sachs to advise it on a possible merger or take-over.

British cable firm Telewest is also believed to be in the running for Freeserve which has 1.6m active Internet users in the UK.

A deal between the two companies would seem to be mutually beneficial. It would give Freeserve access to the NTL's next generation broadband Internet technology and would also help NTL to consolidate its stake in Britain's service provider market.

A Freeserve spokesman, however, plays down the significance of this rumour Monday. "I think everyone has been rumoured to be taking over, or be taken over by, Freeserve. This just adds to the long and distinguished list of names," he says.

A spokeswoman for NTL also dismisses this as nothing more than gossip. "The story has come from a non-NTL source and is merely speculation. We never comment on speculation," she says.

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