T-Online bins Freeserve poker game

High roller walks the walk

T-Online, the German ISP owned by Deutsche Telekom, has ended talks to buy Freeserve, Sunday Business reports.

The newspaper attributes the collapse of the £6 billion bid to "cultural differences", with the Germans "said to have been worried that Freeserve's management, under John Pluthero, might have left the company following the cashing in of their share options.

In the case of Pluthero, that would amount to £20 million, not exactly the biggest incentive to get out of bed in the morning to work for someone else. Can this really be the reason that the bid collapsed -- surely, T-Online would have wanted its own people on board?

T-Online was not supposed to be so concerned about the £6 billion-headline price for Freeserve demanded by its majority owner, Dixons. So it looks for all the world like Dixons overplayed its hand.

The company may find other prospective bidders - NTL, Telewest are supposed to be in the fray - are less willing and less able to shell such a large sum.

Very simply, Freeserve is worth more to T-Online than it is to most other companies, as it could catapult it into a dominant position in consumer Internet access in two out of three of Europe's biggest economies.

Perhaps T-Online will now adopt the more cautious route it took in France and buy a couple of smaller - and much cheaper - ISPs in the UK.

As to Freeserve, it is still very much for sale. ®

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