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Dixons logs on to consolidation story

Charles Alexander,

If ever a merger story encapsulated the spirit of a time, French internet service provider Wanadoo's takeover of the UK's Freeserve has to be it. Freeserve, launched in the UK as an ISP in 1998 by the Dixons electrical retail chain, and floated on the London Stock Exchange in 1999, has seen its value collapse in 2000 as the boom in internet stocks turned to bust. But unlike notorious cases such as clothing retailer, Freeserve has managed to survive the turmoil and looks to have found the ideal parent to take the brand forward.

The all-share purchase by the internet arm of France Télécom values Freeserve at £1.65 billion, or 157p per share. When shares in Freeserve were riding high in early 2000 - at one point the company was worth more than its parent - Deutsche Telekom's T-Online brand looked set to take it over in a deal that would have valued Freeserve shares at around 600p.

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