28 June 2000

Half a billion pounds was wiped from the market value of FreeServe on Tuesday as analysts savaged the ISP for backing out of merger talks with Germany's T-Online, owned by Deutsche Telekom. Yesterday’s plunge of 45.5p to 319.5p sees the value of the Dixons Stores Group subsidiary diminish by a cool £1.2 billion since it revealed the collapse of the merger talks on Monday.

WestLB Panmure’s Miles Saltiel summed-up investors’ frustration: "Freeserve is set for a hard pounding over the next few months, with the steepest part of the growth curve now in the past and the more onerous process of exploitation [of its assets] now on the agenda. The price is set for volatility in a lower range." This, he predicted would range between 300p and 450p.

The plunge in value, said analysts, had been exacerbated by Freeserve's admission that no rival bid was likely in the "near future". )

News source: The Times (London