Tiscali bolsters Euro presence with LibertySurf buyout

NEWS Tiscali bought out Europe@web and Kingfisher's 36.47 per cent share in the free ISP to gain a controlling stake of 72.94 per cent. Libertysurf closed trading on Friday at E7 (£4.43) but Tiscali paid E9.83 (£6.23) per share, with E200m (£126m) paid in cash. Renato Soru, chairman of Tiscali, said the deal would propel the company to become the second largest operator in France claiming the ISP was now the only "true pan-European" internet company. However, But Hellen Omwando, analyst at Forrester, claimed the deal would not give Tiscali a lead in the French market it wanted. She told silicon.com: "It gives the company a good entry into the French market but the problem with this acquisition is that Tiscali is buying into a second tier company - it will not let them vault ahead. If they have a presence in 11 markets it is not important if they do not have a dominant position in at least one of those countries." Omwando added that Tiscali should have bought one of the top three ISPs in France such as chezpoint.fr, Voila or Wanadoo. "To be a Pan European player you need a top tier company in either the UK, Germany or France. Tiscali could have made a better acquisition. LibertySurf is suffering from a decline in traffic and in revenue - it never started out as a company to make money," she said. The Italian company said it would offer shareholders a sweetener of 0.365 Tiscali shares plus a cash offering of E2.13 (£1.35) for each Liberty Surf Share for the remaining publicly floated stock.