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Freeserve CEO aims to please with Wanadoo deal

The CEO of Freeserve today claimed that existing shareholders were getting the best possible deal following the ISP's acquisition by Wanadoo.
Written by Ben King, Contributor

The CEO of Freeserve today claimed that existing shareholders were getting the best possible deal following the ISP's acquisition by Wanadoo.

The takeover values Freeserve shares at 157p, an 11 per cent premium on last night's closing price. John Pluthero, CEO of Freeserve, said this was the best deal it could get, despite the fact that Freeserve shares were trading at 900p earlier this year. Speculation in spring suggested that German ISP T-Online was preparing a takeover deal worth around £6bn - nearly four times as much as the Wanadoo deal. Pluthero said: "In a market that has difficulty valuing us with any precision, a cash deal was never likely." He added that the 11 per cent premium represents good value for shareholders. Dixons, Freeserve's parent company, will be the second largest shareholder in Wanadoo, with a stake of around 12.7 per cent. France Telecom, which established Wanadoo in 1996, will hold 74 per cent of the shares in the enlarged group. Pluthero will become a member of Wanadoo's executive committee. No other changes to the boards of either company were announced. Freeserve will retain its branding in the UK. "It's a very strong brand," said Pluthero. "Customers will see very little difference [as a result of the deal]." The enlarged Wanadoo will lay claim to over four million active subscribers, making it the second largest ISP in Europe behind T-Online. The combined sites receive almost one million unique visitors per month. According to MMXI's figures, the deal will create the fourth largest internet group in Europe. Nicolas Dufourcq, chairman and CEO of Wanadoo, today talked of the group's ambitions to enter the top three, saying more acquisitions will be needed. Dufourcq claimed the enlarged Wanadoo will benefit from economies of scale. "We are in an intelligence business so it is hard to quantify synergies. But we have to be bigger because we are dealing with global actors." Securing both the next generation of hosting software and content deals will be central to Wanadoo's strategy. "There are no territories on the internet," said Dufourcq. "Either you buy world rights or you buy nothing. To buy world rights, you have to be big."
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