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FreeServe Hails Collapse of as “Good News”

News, 19 December 2000

Lossmaking British ISP FreeServe yesterday hailed the closure of its rival [WAMN: 18-Dec-00]. “It is good news for us that there has been a consolidation organically in the market place,” said FreeServe’s chief financial officer Nicholas Backhouse. “It is becoming clearer now to UK consumers who the winners are.”

However, the Backhouse interpretation of “winners” and “good news” was not shared by London’s stock market where FreeServe shares fell by 1.75p to 111p. Nor did investors regard as glad tidings the company’s trebling of losses to £38.3 million for the 28 weeks to November 11 – greeted by Backhouse as “the strongest set of results we have produced since flotation [in July 1999].”

FreeServe appears likely to survive this ‘strong result’ thanks to the recent agreed bid by France Telecom-owned ISP Wanadoo, a deal so unpopular with the French bourse that Wanadoo stock has been marked down by almost 18% since it was announced earlier this month [WAMN: 7-Dec-00].

Meantime, observers believe that Freeserve will approach's administrator, PricewaterhouseCoopers, to express interest in some of the failed company’s technology - if not in the business itself or its user base.

FreeServe is controlled by giant electrical retailer Dixons Stores Group which has been trying to find a buyer for several months.

News source: The Times (London)