Freeserve Shares Soar on Speculation of T-Online Bid

Freeserve's shares rose sharply after rumors of a possible £6.5bn bid from T-Online, the German internet service provider. The speculation fueled a 24% increase in Freeserve's stock price, with shares closing at 487p. The surge also boosted Dixons, the electrical retailer that owns 80% of Freeserve, with its shares closing 17% higher at 321p. The news came as a spat between Dixons' chairman, Sir Stanley Kalms, and the director-general of the Confederation of British Industry, Digby Jones, escalated.

Key Takeaways:

• Freeserve's shares rose 24% on speculation of a £6.5bn bid from T-Online, with shares closing at 487p.
• The surge in Freeserve's stock price also boosted Dixons, with its shares closing 17% higher at 321p.
• Dixons owns 80% of Freeserve and is subject to restrictions on selling its stake due to the terms of Freeserve's float last year.
• T-Online's parent company, Deutsche Telekom, declined to comment on its intentions, citing US SEC rules.
• The spat between Sir Stanley Kalms and Digby Jones intensified, with Sir Stanley writing a letter expressing his "dismay" at the CBI chief's remarks.
• Sir Stanley hinted that even his predecessor, Adair Turner, would not have crossed him in this way.

Statistics:

• Freeserve's market value is £5bn, with 40% of this value, £2bn, being represented by the company's current market price.
• Dixons' stake in Freeserve is worth £2bn at the current market price.
• The FTSE 100 listing of 18-month-old FreesERVE has replaced Wolseley, the plumbers' merchant.

Sources:

• "Freeserve shares soar on T-Online bid speculation" by Reuters
• "Dixons shares surge on speculation of Freeserve bid" by Bloomberg