Libertysurf Shuts Down in The Netherlands, Denmark

HAARLEM, NETHERLANDS (06/13/2000) - Pan-European Internet service provider Libertysurf Group SA is pulling out of Denmark and the Netherlands to focus on the larger European countries.

"Denmark and the Netherlands are not part of our strategy," said Stephane Huet, international director for Libertysurf. "We want to focus on five larger countries: Great Britain, Germany, Italy, Spain, and France."

Libertysurf, with 1.8 million users, one of the largest European ISPs (internet service providers), inherited the businesses it's terminating when it acquired The X-Stream Network, a competing ISP and pioneer in offering free access, in March this year for US$68.35 million.

The X-Stream Network never succeeded in getting a large footprint in Denmark or the Netherlands. "We can't conquer a spot on the Dutch market because X-Stream launched too late. Denmark was never really launched," said Huet. The staff in both countries will be offered positions elsewhere within Libertysurf.

The X-Stream Network was also operational in Sweden and in Norway. Those two businesses have been renamed Libertysurf and will stay online. "We are quite strong in those markets. In Sweden, we are the fifth largest ISP," said Huet.

"Additionally, the Swedish market is a good breeding spot for technology, a good test ground for other Libertysurf countries."

Libertysurf is now holding talks with companies that may take over its Dutch business. The French company is in a hurry. Sources say Libertysurf wants a letter of intent signed today. Talks with three interested ISPs were held on Friday.

Two have already decided they will not make an offer this afternoon, WebWereld has learned. The remaining party is Superweb, a startup that offers flat-rate Internet access for a monthly fee.

According to people involved in the negotiations, Libertysurf is looking to get between $25 million and $100 million for the Dutch unit. That amount would be based on the value per subscriber when Libertysurf floated on the Paris stock exchange in last March. It is highly unlikely that Libertysurf will get what is asked for. If Superweb is to make an offer, it will be close to $4.5 million in stock, insiders say.

Libertysurf was formed in April 1999 and is one of Europe's leading ISPs. The major shareholders include Kingfisher PLC, one of Europe's leading retail groups, and Europ@web, a group created by Bernard Arnault, Chairman of LVMH.

Libertysurf, in Paris, can be reached at http://www.libertysurf.com/.

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