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Sunday July 25, 8:39 pm Eastern Time
Freeserve shares set to be priced at
150 pence -FT
LONDON, July 26 (Reuters) - Shares in Britain's biggest Internet
service provider Freeserve (quote from Yahoo! UK & Ireland:
FRE_u.L) are set to be priced at 150 pence when it starts trading at 1330 GMT on Monday, the
Financial Times reported.
Freeserve will be listed on the London Stock Exchange and Nasdaq in Europe's first major Internet
flotation.
The Financial Times, which did not give a source for its information, said the shares were expected
to leap in value by up to 30 percent almost immediately as investors who missed out on the 20-times
oversubscribed initial public offering (IPO) scrambled to buy.
Freeserve shares were being quoted at 210-217 pence in the grey market on Friday.
The 150 pence offer price, which was at the higher end of the 130-150 pence indicative range, gave
the company an overall valuation of 1.5 billion pounds, the Financial Times said.
Grey market prices for Freeserve were first quoted by financial bookmakers City Index at
175-183p on July 15 and have jumped since then as enthusiasm about the float has increased.
British retailer Dixons (quote from Yahoo! UK & Ireland: DXNS.L), the company's founder and
majority shareholder, is selling 18.25 percent of Freeserve via an offer of 153.04 million shares.
Freeserve was launched last September and swiftly became the UK's top online firm by scrapping
the subscription fee for Internet connection.
It relies on a share of call charges, plus e-commerce and advertising, generating revenues of 2.73
million pounds to May and making a net loss of 1.04 million.
Although still the UK market leader with 1.3 million users, Freeserve now faces rivalry from 70 to
100 ''free'' competitors, including America Online (NYSE:AOL - news) which has 20 million
subscribers worldwide.
The Financial Times said Monday's float would raise 264 million pounds, to be divided between
Dixons and Freeserve. Freeserve's chief executive John Pluthero would receive one million pounds'
worth of shares, the paper said.
British Internet and telecoms company Energis (quote from Yahoo! UK & Ireland: EGS.L), which
provided Freeserve's telecoms support, had purchased a 1.85 percent stake in the company, the
Financial Times said.
Officials at Dixons and Freeserve could not be contacted for comment.
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