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To: TonyL who wrote (2048)	7/12/1999 10:26:00 AM
From: LABMAN	Respond to of 3243

TONY L further comments on freeserve July 11 1999 BUSINESS NEWS Freeserve looks like a risk worth taking FREESERVE is either a crock of gold or the biggest heist since Brinks-Mat, and tomorrow investors can make up their own minds. Dixons, the electrical retailer and Freeserve's parent company, will launch its long-awaited prospectus for the £1.35 billion to £1.45 billion flotation. The contents will make gripping reading and any normal valuation criteria will have to be thrown out of the window. Freeserve is losing money - and will do for some time - and has unproven management. It wants to raise about £300m from selling 18.25% of its equity. Half will fund expansion, half will go to Dixons. If Freeserve's advisers, CSFB and Cazenove, are right, there will be lots of interest, and if City fund managers shy away Americans will mop up the slack. John Clare, Dixons' chief executive, said last week buying Freeserve shares involved taking a gamble on the internet's future - a risk, but one worth taking. He is probably right. Freeserve is a pioneer of Britain's fledgling net industry and has a head start over many rival free net service providers. John Pluthero, its young chief executive, conceived the idea and now he has the challenge of keeping ahead of the chasing pack. Pluthero is not a cyberspace Dick Turpin; he is an articulate executive with marketing flair and his rise has won him respect, not envy, from colleagues over whom he has leapfrogged. Freeserve will have a bumpy ride as a public company but once it can prove that e-commerce can generate valuable revenues it should start to put solid foundations beneath its share price. Whether its launch value should be more than that of a high-street giant such as Debenhams (present market value £1.6 billion) is another matter. Manchester United THE stories that surfaced last week surrounding Martin Edwards, Manchester United's chief executive, and the future of his 14% stake in the £560m football club will not be the last. For two decades bidders have been courting Edwards. In the early 1980s the late Robert Maxwell offered £6m. Then in the mid-1980s David Whelan, chairman of JJB, the sports-shop chain, offered a lot more. He was followed by Michael Knighton and more recently by BSkyB, which won Edwards's agreement at £623m only to have the deal blocked by the Competition Commission. Now some new names have been mooted, including the Sultan of Brunei. If Edwards wanted to sell, now seems like a good time with United having just won the treble. Under Edwards's reign, United has become the world's most profitable club. Edwards plays his cards close to his chest. Each time he has concluded a deal he goes to ground for two days before the announcement and last week he did just that again. Watch this space. Liberty International THE business interests of Donald Gordon, the South African tycoon, have often seemed as intricate as Hampton Court's maze. He has moved to simplify things but the confusion has produced a buying opportunity in Liberty International, which is listed in London. Liberty owns 72% of Capital Shopping Centres (CSC), whose assets include three big retail centres, MetroCentre, Lakeside and Braehead, now under development. But, while CSC shares have moved from 337p to 441 1/2p this year, valuing it at £1.8 billion Liberty has only edged up from 454p to 466 1/2 p CSC now trades at its historic net asset value; Liberty stands at a 22% discount. At this level the City has ignored Liberty's other interests in financial services and its cash pile. These assets are worth about £300m. Liberty shares climbed 5 1/2 p on Friday but they should top 500p. John.waples@sunday-times.co.uk Kirstie Hamilton is away Next page: GE hits back in power game Next: GE hits back in power game Copyright 1999 Times Newspapers Ltd. This service is provided on Times Newspapers' standard terms and conditions. To inquire about a licence to reproduce material from The Sunday Times, visit the Syndication website.

To: TonyL who wrote (2048)	7/12/1999 10:31:00 AM
From: LABMAN	Respond to of 3243

tony l further comments on freeserve Home - Yahoo! - Help Yahoo! Messenger - online friends, instant messaging, voice chat [ Business \| US Market \| By Industry \| IPO \| AP \| S&P \| International \| PRNews \| BizWire \| CCN ] Monday July 12, 10:00 am Eastern Time Freeserve seen boosting interest in tech start-ups By Andrew Priest LONDON, July 12 (Reuters) - The upcoming flotation of British electricals retailer Dixons Group's (quote from Yahoo! UK & Ireland: DXNS.L) Freeserve Internet service will encourage major investors to play a bigger role in early stage funding of high tech firms, venture capitalists said on Monday. The Freeserve float -- set to value a company which didn't even exist a year ago at between 1.31 billion and 1.51 billion pounds -- will give wary institutional investors a tantalising glimpse of the huge potential rewards available from investing in high tech firms. ''The Freeserve float will stimulate a lot of interest from investors in high tech companies,'' said Chris Evans, the founder of venture capital firm Merlin Ventures. The float will also boost the profile of technology focused venture capital funds which seek funding from institutional investors such as pension funds, Evans said. Freeserve, which offers free Internet access and British-focused content, was set up and funded in-house by Dixons. The vast majority of technology related firms, though, are funded in their early years by venture capitalists, which provide equity in return for a stake. Big investors have typically been unwilling to spare much cash for early stage venture capital funds, preferring the lower but more predictable returns on offer from larger unquoted deals such as management buy-outs (MBOs). Investors are put off by the capital hunger of fast growing high technology firms and the odds that most, like major U.S. Internet companies, are unlikely to turn a profit for years. ''When you invest in early-stage companies, for the first three to five years you would expect them to be capital consumptive and loss making. This can put off potential investors,'' said Paul Castle at MTI Partners, a technology focused venture capital firm. Freeserve's rapid arrival on the stock market -- conditional dealings begin on July 26 just 10 months after it was launched -- sets a useful precedent for other high tech firms which want speedy access to the market's deep pool of capital. ''A lot of entrepreneurs want to get their companies listed a lot earlier but are not able to at the moment because there is only interest in companies worth over 150 million pounds,'' said Evans, who has established 15 bioscience companies and floated three firms on the London Stock Exchange, including vehicle technology firm Toad plc (quote from Yahoo! UK & Ireland: TOA.L) and Chiroscience (quote from Yahoo! UK & Ireland: CRO.L). A successful Freeserve float would go some way to erasing the poor returns which have plagued early stage venture capital funds in recent years. ''It's a defining moment. Early stage tech funds could take off on the back of Freeserve,'' Michael Jackson, chairman of Elderstreet Investments and software services company Sage (quote from Yahoo! UK & Ireland: SGE.L), told a venture capital conference last week. Early stage venture capital funds returned 8.3 percent since inception to December 1998 versus 19.2 percent by large MBOs, according to the British Venture Capital Association (BVCA). The lag in performance by early stage funds is partly due to the unwillingness of stock market investors to put high valuations on high technology and biotechnology companies which are still in their development phase, the BVCA said. ''However, in the last few years, it has become much easier to float such companies in the UK. Early stage fund returns are showing improving performances which the BVCA expects to continue,'' a spokeswoman for the trade body said. Early stage venture capital funds will also benefit from growing pressure on pension funds and other institutional investors to increase their weightings to venture capital funds. Three of Britain's largest consulting actuaries -- which advise pension funds on investment strategies -- last week issued a statement backing higher allocations to unquoted securities. Venture capital currently accounts for just one percent of pension fund money versus five percent by U.S. funds. Related News Categories: funds, IPOs, US Market News Help Copyright © 1999 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. See our Important Disclaimers and Legal Information. Questions or Comments?