Shares in electronics retailer Dixons Plc rose another 4% yesterday to 12.36 pounds after the company confirmed it is to float Freeserve, the UK’s largest internet service provider. Dixon’s share price has more than doubled since Freeserve was launched in October 1998 and the ISP has now attracted about 1.5 million members. Dixons revealed few details of the IPO plan, saying simply that a minority interest would be offered for sale. Credit Suisse First Boston and Cazenove & Co have been appointed global coordinators of the offering.
Proceeds will be used to improve the service and Freeserve chief executive John Pluthero said the IPO was an opportunity to build quality and content. While the success of Freeserve has astonished observers, it has attracted a host of imitators. It has even stirred up lethargic incumbent telco British Telecommunication Plc to beef up its offerings and BT now offers toll-free charges at weekends.
London financial analysts expect that an IPO could value Freeserve at up to $3bn. But doubts over the value of internet stocks on both sides of the Atlantic and growing competition in the marketplace could make the IPO a more low-key event.
