Wanadoo negotiates to buy Freeserve for 3 billion euros
Following the failure of negotiations with T-Online, the leading UK
intent access provider, Freeserve, is in advanced discussions with
Wanadoo, the France Telecom subsidiary. The French Telecoms operator is
obviously speeding up its move onto the UK market, announcing that Wanadoo
is negotiating to buy Freeserve through an exchange of shares.
Freeserve has 2 million subscribers in the UK and is 80 per cent owned
by retailer Dixons. Freeserve's market capitalisation has fallen from
£4bn in April to £1.47bn, making it an investment opportunity for the
French group, which could jump to the top spot in the UK and double its
number of subscribers. The price for Freeserve, according to analysts,
could be $1.8bn, far below the £6bn suggested in May.
Wanadoo SA, the French Internet-service provider 88%-owned by France
Telecom, has confirmed it has entered talks on the possible acquisition of
UK ISP Freeserve PLC. The talks are taking place amid continued
consolidation in the European ISP market, where several second-tier
players are seeking new parents. Freeserve has been on the market for
several months, and its current owner, the electrical goods retailer
Dixons Group PLC, has suggested any bid would be unlikely to be valued
above its closing share price on Tuesday of 146p ($2.07). Based on that
price, Freeserve's market valuation is around GBP1.5bn ($2.13bn). It is
expected the Wanadoo transaction, if completed, would take the form of a
share swap.
Tadpole Technology is raising more than £11 million to fund a US
acquisition and accelerate the growth of its next generation
peer-to-peer technology.
'The fact that we have been able
to raise this money at a time when the market is in the state it is,
proves that we have a very strong proposition', stated chief executive Bernard
Hulme.
Tadpole (TAD) is buying Cycle, a
Silicon Valley-based maker of small, rack-mountable high-powered Sun
Microsystems computers. Tadpole will pay $8 million (£5.6 million) in
Tadpole shares. The Cycle business complements Tadpole's existing Sun
hardware business, Tadpole-RDI, which makes portable computers based on
Sun's designs that run the Sun Solaris operating system and hence all
Sun applications. Cycle's products appeal particularly to Internet
Service Providers (ISPs), Application Service Providers (ASPs), network
infrastructure providers and any large company that needs to fit a lot
of high-powered Sun computers into a small space.
The money is not just to fund
the acquisition, but also to fund the planned growth of the hardware
business, and, more importantly, growth in the company's peer-to-peer
'Magi' suite of software that it purchased from Endeavours Technology
early this year.
'We think we have a fantastic
product line here and we want to speed our product road-map. We have
already taken revenues for the Magi products, but now want to put our
foot down on the gas and exploit the market', Hulme said.
The strategic acquisition of Cycle for a total consideration of $8
million (£5.6 million) in Tadpole shares to further accelerate Tadpole's
growth in the design, development and sale of specialist high-density
motherboards and computer systems for the customers of Sun Microsystems,
Inc ("Sun").
The raising of £11.2 million (net of expenses) by way of the Placing
and Rights Issue. Approximately £5 million of the proceeds raised will
be used to provide additional working capital for Tadpole's enlarged
hardware division. The balance will be invested in accelerating
development and roll-out of the peer-to-peer web software products of
Tadpole's Endeavors division, as well as extending the division's sales
and marketing reach in new geographies and markets. The Placing and the
Rights Issue have been fully underwritten by Beeson Gregory Limited.
Cycle designs and markets high-density, multi-processor, rack
mountable computer systems. They enable Sun's customers in the embedded
OEM, telecommunications and networking markets to install Cycle products
as part of a corporate computer network infrastructure.
Tadpole is already generating revenues from its peer-to-peer
technology. It has won an order for MagiDispatch, an intelligent
dispatching solution for call centres and field service workers. One of
the components of the MagiDispatch solution is MagiWAP, which
metamorphoses the mobile phone into a transportable Internet business
tool. MagiWAP enables WAP phone users to access, read, move, fax and
print documents stored on web-enabled devices, whatever their location,
whatever the time, without the need to first download the document to
the WAP phone.
The MagiDispatch solution complements the software of the
Tadpole-Cartesia division and the J-Slate wireless Internet device. The
solutions address mobile workforce productivity issues and gains sought
by the utility and telecommunications industries. In the past financial
year, Cartesia has extended its customer base - GPU Energy, Norweb,
ScottishPower, TXU Electric and Gas, and Vivendi's Three Valleys Water
are examples.
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