UPDATE 1-United Internet buys Freenet's DSL business
* United Internet to pay around 123 mln eur for DSL unit
* Price comprises around 70 mln eur cash, 4.58 mln shares
(Adds details, background)
FRANKFURT, May 26 (Reuters) - United Internet (UTDI.DE) said it has agreed to buy Freenet's FNTG.DE DSL business for about 123 million euros ($172.1 million), ending months of talks.
United Internet said on Tuesday it would pay about 70 million euros in cash and transfer 4.58 million of its own shares to Freenet.
At 0601 GMT, shares in United Internet were indicated 3 percent higher, according to pre-market data, while Freenet's shares were seen 4.5 percent higher.
If the price of United Internet shares fell below 12 euros at the time that Freenet's DSL contracts were migrated, the company would pay a compensation of up to 4 euros per share, United Internet said.
The two companies plan to migrate the DSL contracts by the end of this year, they said.
Analysts had said earlier this year they estimated the DSL business's fair value at 200-400 million euros, with most estimates around 250 to 300 million.
United Internet, together with Drillisch (DRIG.DE), tried to take over and carve up Freenet in early to mid-2008, a move Freenet thwarted with a 1.63 billion euro takeover of telecom provider Debitel.
Freenet later spun the DSL unit off and put it up for sale.
(Reporting by Maria Sheahan)
- Tweet this
- Share this
- Digg this