Original URL: https://www.theregister.com/2000/10/31/libertysurf_kingfisher_wants_out/

LibertySurf: ‘Kingfisher wants out’

Talk of the City. Apparently

By Drew Cullen

Posted in On-Prem, 31st October 2000 12:03 GMT

Kingfisher, the British retail conglomerate, wants to offload its 35 per cent stake in loss-making LibertySurf, the French ISP modelled on Freeserve, according to "whispers", reported in today's Guardian.

So where do these whispers come from? It looks like the City, where Kingfisher chief executive Sir Geoff Mulcahy was doing the rounds last week - apparently promoting the company's proposed demerger into two separate businesses.

Mulcahy it seems is unhappy with the losses that continue to pile up at LibertySurf - expected to cost Kingfisher £40 million and is looking for "a corporate way out", according to an unnamed dealer quoted in The Guardian.

A sale of the stake - even at a bargain basement price - would lift Kingfisher's share price and reassure investors nervous about the demerger.

But who would buy? Presumably Groupe Arnault, the owner of 40 per cent of the company has first refusal rights over the Kingfisher stake. Also it probably has rights over who can buy in. But maybe Groupe Arnault wants out too.

Realistically, only another cash-rich ISP would be interested - institutional investors would shy away at something losing so much money.

That leaves out Kingfisher's new best friend Freeserve. The British ISP does not have huge cash resources to draw upon - unlike France Telecom or Deutsche Telecom, or Tiscali (post World Online takeover), or AOL. And as we all know, it's up for sale, anyway.

Prey turns predator

LibertySurf may lack critical mass outside France and, more questionably, the UK and Spain but it is still capable of acting as a predator. Especially when no money changes hands. Yesterday it announced the acquisition of rival Freesbee, for FFr154m worth of shares.

This looks like a bit of a bargain - Freesbee reckons it needed an additional FFr230 million in funding to see it through to its estimated break-even point in 2002. And it took the quick, safe route with a trade sale. The company has 110,000 retail subscribers and some corporate customers. ®

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