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EDITIONS
Monday, 8 January, 2001, 14:44 GMT
Italy's Tiscali buys Liberty Surf
Internet
The European ISP market is consolidating fast
Italian internet service provider Tiscali has agreed to buy France's Liberty Surf in a deal valued at 645.5 million euros (408.5m).

Tiscali will buy the stakes of UK retailer Kingfisher and France's Europ@web, held by Group Arnault, which both own 36.47% of Liberty Surf.

The acquisition is part of the consolidation process in the European ISP market, as the big four players - France's Wanadoo, Spain's TerraLycos, Deutsche Telekom's T-Online and Tiscali - swallow smaller rivals.

Liberty Surf is France's number two ISP with about 1.1 million active subscribers, behind Wanadoo, which has two million subscribers.

Increasing subscriber base

Based on Tiscali's Monday morning share price of 13.50 euros, the deal valued LibertySurf shares at about 7.05 euros each.

The shares closed at 7 euros on Friday, and were suspended on Monday ahead of the takeover announcement.

Tiscali said the Liberty Surf deal would increase its active subscriber base to 4.9 million from 3.8 million.

The users it has registered to its, mostly free, internet access services, will climb to 10.7 million from 6.8 million after the Liberty Surf takeover.

Tiscali said in a statement it would have second or third positions in Italy, France, the Netherlands, Belgium Switzerland, the Czech Republic and South Africa following the acquisition, which is due to be completed in the first quarter of this year.

Last year Liberty Surf ran into trouble in the UK, when it launched a cut price internet service, offering unmetered off-peak access for an annual charge of 20.

The company was swamped by demand following the offer, which was made through Kingfisher's Comet and Woolworth's stores, and was forced to limit access for some subscribers.

Liberty Surf was effectively put up for sale last year when Deutsche Bank was appointed to advise on its strategic options.

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