* 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 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
Freenet later spun the DSL unit off and put it up for sale.
(Reporting by Maria Sheahan)