LineOne and AOL France up for grabs

It's an ISP bonanza! LineOne and AOL France are both under the hammer, although one is in distinctly better health. It isn't LineOne - the UK ISP's sale price LineOne has slumped since being put on the market by BT and United News & Media in November, according to those "close to the negotiations".

Italian ISP Tiscali is still favourite to buy LineOne, but although it reportedly offered £200 million for LineOne in January, the FT reports that the price tag has dropped to between £65 million and £100 million. And any sale is more likely to be share-for-share rather than cold, hard cash.

As for AOL France, Vivendi is ready to sell its majority stakeholding (55 per cent) back to AOL Time Warner for around £475 million. Vivendi has become a big competitor to AOL Time Warner recently thanks to various acquisitions - in particular Seagram. Vivendi tried to used the AOL France stake as entry in AOL Europe, but it failed and now it wants out.

Since the AOL/Time Warner merger was cleared, the combined company has been keen to own outright everything with its name in - £475 million is above and beyond what the stake is really worth. The stock market wasn't too impressed though and has knocked a percentage point and a bit off Vivendi's share price.

As for the LineOne deal: since it was expected to be closed by the end of last month, the question is: did Tiscali delay or did BT/UN&M try to hold out (they were known to want £250 million)? Either way, it hasn't worked out for BT/UN&M. Thanks to continuing concerns over Internet valuations, ISPs have never been cheaper.

Tiscali has used this to its great advantage by snapping up loads of well-priced ISPs in just the last year - it is now the second biggest ISP in Europe and all at a fraction of the cost it would have cost, say a year earlier.

Rival companies purported to be still interested in LineOne are T-Online and Wanadoo. Wanadoo now owns Freeserve and T-Online is owned by Deutsche Telekom and so, unsurprisingly, BT has taken a liking to Tiscali.

LineOne has 300,000 subscribers and AOL France 600,000. Yet AOL France is coming in at five times the price. ®

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