PARIS — Be patient: Investing in the Internet is a long-term strategy.
That was the message management at LibertySurf SA — the Internet service provider jointly controlled by British retailer Kingfisher PLC and EuropatWeb, the Internet industrial arm of Groupe Arnault — delivered last week to shareholders concerned that the stock price of the ISP has dropped almost 20 percent, to $29.94, since its introduction on the Paris Bourse on March 16.
Pierre Besnainou, president of LibertySurf, told shareholders the stock was outperforming most in the sector, including “Tiscali or Free Serve, which have lost 50 percent since mid-March.”
In addition, Besnainou cited a recent decision by the Paris Bourse to integrate LibertySurf into the SBF 120, an index of Paris’ 120 largest public companies, as evidence that the firm was a “sound long-term investment.”
Meanwhile, France Telecom’s ISP, Wanado — LibertySurf’s main access competitor in France — was introduced on the stock market here in mid-July in an IPO that valued the company at almost $18 billion. The issue, which surged 10 percent to $19.53 on its first day of trading, finished this week at $17.84. The stock went public at $17.60. All prices are converted from euros at current exchange.
In another development last week, speculation was raised in the European press that LibertySurf may be a takeover target of Italian ISP Tiscali SpA. An Arnault spokesman declined to comment on the rumors.
A source familiar with the matter, however, said LibertySurf has been approached by various parties who have expressed interest in a possible acquisition deal. That interest is believed to have been triggered by recent statements of LibertySurf officials, who have noted the company would probably be involved in the ISP sector’s inevitable consolidation.
EuropatWeb’s European team contributed to the creation of LibertySurf. It also set up the financial portal Zebank. Most recently, EuropatWeb, in a joint venture with Bernard Arnault’s LVMH, launched on June 19, sinking $50 million into the project.
Today, EuropatWeb owns nearly 50 companies and has established a presence in nine countries in Europe, the U.S., South America and Asia.
EuropatWeb was established in July 1999 with a capital injection of $462 million; its mission is to gather and manage Internet-related companies with robust growth potential.

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