Internet service provider Freeserve has announced it is in talks with an unnamed company that could result in a takeover.

The ISP, in which Dixons has an 80% stake, issued a statement confirming it had started discussions “which may or may not lead to an offer being made for the company in shares”.

Freeserve did admit, however, that it was “unlikely that any such offer would be made at a substantial premium to Freeserve's share price”. The current price of 140p would value Freeserve at around £1.5 billion.

In the absence of any details, the current favourite for the mystery bidder is French ISP Wanadoo.

News source: The Times (London)