Dixons will receive a cash windfall of up to £1.51 billion when it floats a 18.25 per cent stake in Freeserve next month.
The valuation of between 130p and 150p per share for the flotation will be tied down to a finalised price by 26 July, although it still means the 18.25 per cent stake will be worth between £1.31 billion and £1.51 billion. Freeserve generated £2.73 million in sales, ended 1 May and recorded a loss of £1.04 million.
John Pluthero, chief executive of Freeserve, who will make a £1 million paper profit from the flotation, said: 'This is an advance in Freeserve's development. We have a strong market position and exciting plans for the future.'
Sir Stanley Kalms, chairman of Dixons, added: 'In the nine months since Freeserve launched, it has already demonstrated its ability to attract and retain an enviable customer base.'
Dixons will also launch a £200 internet machine to meet the demand for cheap PCs and Web access.
Nick Gibson, analyst at Durlacher, said: 'Dixons could team up with another company such as Sega with the Dreamcast, driving games business and Freeserve.'
He added: 'Irrespective of the Freeserve valuation, there are still questions about converting the subscribers to cash - this valuation equals about £1,000 per subscriber.'
Freeserve also acquired Babyworld.com, a parenting and pregnancy site, for £3.7 million and will launch an internet credit card with HFC Bank.
See Finance, Page 6.
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