(WEB HOST INDUSTRY REVIEW) — German mobile carrier freenet AG (www.freenet.ag) has revealed that it is selling off its web hosting division Strato (www.strato.eu), according to a report by German newspaper Hamburger Abendblatt.
With more than 1.3 million customers in six European countries and over 4 million domains in its care, Strato is easily one of Europe’s largest web hosts.
Analysts at Landesbank Baden-Wuerttemberg, the parent company of three commercial bank and the Landesbank for some Germany states, anticipate the market price of the web host to be around $336 million.
“We would consider a sale of Strato as good news for the stock as it would reduce Freenet’s debt load to 1.3 billion euros ($1.85 billion) at the end of FY 2008) and take further uncertainties from the stock,” Stefan Borscheid, an analyst for Landesbank Baden-Wuerttemberg, writes in a note.
The bank also named United Internet AG (www.united-internet.com) as the likely buyer.
Just last month, United Internet AG’s subsidiary 1&1 Internet AG agreed to buy freenet’s DSL business for $172 million, based on a preferred distribution partnership.
At the time, Freenet’s chief financial officer Axel Krieger said that freenet could sell off more than its broadband operations, and aims to reduce debt through the sales.
With over 7.9 million customer contracts, United Internet AG is one of the largest Internet service providers.
The company offers a range of hosting and Internet services through its brands, GMX, WEB.DE, 1&1 and united-domains.
In 2008, freenet purchased the mobile division debitel and acquired debt of over $1.4 billion.
The company had said earlier that it would focus its efforts on its mobile carrier and mobile Internet operations in the future.
On reports that the company may soon sell off Strato, Freenet shares rose 11.1 percent to top Frankfurt’s technology index .TECDAX on Friday.
