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AOL puts 450 price tag on UK users
(Business, The (London) (KRT) Via Thomson Dialog NewsEdge) Jun. 11--Behind-the-scenes bidding could have already pushed the price for AOL's UK operations above 1bn (E1.47bn, $1.88bn).
The giant US internet service provider has not put a specific price tag on its UK business, but such a figure would equate to 450 for each AOL customer -- the level seen during the technology and telecoms boom of six years ago.
AOL is understood to be offering its UK business, which comprises 2.2m customers, for sale as part of an overhaul of its global operations that might also include a sale of its German and French businesses.
Likely bidders for the UK business are thought to include Carphone Warehouse and Vodafone. Some industry sources also believe BT and NTL may also be prepared to make an offer.
In the earlier part of last week, Carphone Warehouse was identified as a frontrunner in the negotiations and was reported to have been mulling a 1bn bid for AOL's UK arm. But Carphone founder and chief executive Charles Dunstone said the company is under no pressure to make acquisitions while it continues to grow organically at its current rate.
Last week, Carphone announced that, in addition to a 36 percent rise in pre-tax profits, it has already signed up 340,000 new customers to its Free Broadband Forever service package.
According to Dunstone, the service has already attracted more customers in eight weeks than the company had anticipated signing in the first four months. The company made a pre-tax profit of 136.1m for the year ended April 1 2006 as opposed to a figure of 100.4m for the same period a year earlier. Revenues also rose by more than 29 percent to 3.06bn from 2.355bn a year earlier.
But some industry sources believe other potential bidders may not have the luxury of time. Vodafone's Arun Sarin is this week meeting Vodafone's shareholders in the wake of reporting record 14.9bn loss earlier this month. He is under increasing pressure to deliver a strategy to match rivals' new converged services deals, which offer fixed and mobile communications including free internet services from the same provider. Acquiring AOL UK would give Vodafone immediate access to more than 2m internet customers.
There has also been speculation O2 could be interested, but a source close to the company has indicated that it is unlikely to bid.
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