Takeover talk causes Freeserve shares to shoot

Freeserve shares shot up by 10 per cent following rumours that Tiscali and Wanadoo may bid for the company, Britains largest ISP.

Analysts speculate that Italy's Tiscali and French ISP Wanadoo are aiming to bid for Freeserve, resulting in the company's shares rising from an all time low of 124p to 165p early on Friday. Tiscali, however, have denied interest in bidding for the ISP. Despite good news over the rise there are fears that retailer Dixons Group will sell its 80 per cent stake in the company as Dixon's shares remained at 217p. Dixons' shares remain far behind their peaks of 900p in March. These issues, combined with Freeserve's disrupted progress toward unmetered access in the UK, could cause investor interest to dampen. A spokesman for Freeserve said dips in share price were partly due to the volatility of the markets and one of the key reasons for the rise is Freeserve's consistent good performance in the sector.