By Dave Marino-Nachison (TMF Braden)
June 26, 2000
U.K. Internet service provider Freeserve PLC's (Nasdaq: FREE) hopes that the T-Online International division of Germany 's Deutsche Telekom (NYSE: DT) would buy the company were dashed, according to news reports that sent the shares falling in overseas trading this morning. Freeserve trades in the U.S. as American depositary shares.
Dixon 's Group, a U.K. electronics retailing magnate, owns some 80% of Freeserve and said in May it would look to sell some or all of its stake. T-Online and others, including NTL Inc. (Nasdaq: NTLI) and Lycos (Nasdaq: LCOS) betrothed Terra Networks (Nasdaq: TRRA) , have all been mentioned as potential buyers and/or partners, but today it was unclear whether Dixon's would be able to sell the whole company.
Freeserve, as its name implies, was the first real "free ISP" to gain traction in the U.K. It offered gratis access in exchange for a piece of related telephone charges, but as competitors moved to a flat free schedule a la America Online (NYSE: AOL) it did the same in April. Losses have nevertheless mounted as new subscriber growth has been less than some expected.
Free ISPs have had a rough go of it in the U.S. public markets, as a 12-month chart also including NetZero (Nasdaq: NZRO) and Juno Online (Nasdaq: JWEB) shows. Freeserve's shares have likely been held up by hopes of a sale if the stock's May stabilization is any indicator.
News to Go
Philip Morris (NYSE: MO) agreed to buy Nabisco Holdings (NYSE: NA) for $55 per share in cash plus the assumption of $4 billion in debt to build out its Kraft Food business, some of which would then be sold to the public in an initial public offering. R.J. Reynolds Tobacco (NYSE: RJR) will buy Nabisco Group Holdings (NYSE: NGH) for $50 per share.
Apparel designer and marketer Nautica Enterprises (Nasdaq: NAUT) said CFO W. Donald Pennington resigned. He'll be replaced by Wayne Marino, senior vice president of administration. Pennington became CFO in 1995.
Several global automakers are bidding to get into the Korean market on the cheap. General Motors (NYSE: GM) is teaming with Italy's Fiat to buy bankrupt Seoul automaker Daewoo (sans the company's machinery, truck, and bus operations) but must compete with another joint bid from Daimler Chrysler (NYSE: DCX) and Hyundai. Ford (NYSE: F) made a solo bid.
Israeli zinc-air battery developer Electric Fuel Corp. (Nasdaq: EFCX) said it developed a battery for use with Palm Inc.'s (Nasdaq: PALM) popular handheld digital computers. The battery, the company said, will let Palm users work as their rechargeable battery wears down. A prototype will be on display at the PC Expo in New York in June. The battery could be used as a backup power source or a portable recharger.
E-grocer Webvan (Nasdaq: WBVN) agreed to buy HomeGrocer.com (Nasdaq: HOMG) in a stock swap valued at $1.2 billion based on Friday's closing prices. HomeGrocer.com stockholders will get 1.07605 shares of Webvan stock for each of their company's stubs. The combined companies operate in nine cities and expect to be in 13 by year's end. The deal is projected to close by early Q4.
