French ISP Wanadoo is interested in AOL Europe

Rival Internet service providers (ISPs) keen to acquire the once-ailing European operations of Time Warner Inc.’s America Online (AOL) division may have to look elsewhere to expand their operations.

Speaking Tuesday at a Smith Barney investor conference in Phoenix, Time Warner Chief Executive Officer (CEO) Richard Parsons called AOL Europe “a pretty interesting success story” and said rumours in late 2003 about him holding talks to sell the European business were off the mark, according to a report published Wednesday in the online edition of The Washington Post. Smith Barney is a division of Citigroup Global Markets Inc.

“In this overheated media environment, anytime you have lunch with somebody who is not related to you by blood there is speculation that there must be some deal being worked on,” Parson said in the media report. Those remarks came on the same day Olivier Sichel, chairman and CEO of French ISP Wanadoo SA, said in a radio interview that he is interested in all opportunities to expand his company’s European presence, including a purchase of AOL Europe. Sichel said he expects further consolidation in the European ISP market.

“We have held no talks with Time Warner about AOL Europe but as we have said all along, we aim to strengthen our business in Europe and that means we will study all options,” a spokeswoman for France Telecom SA said Wednesday. France Telecom, which spun off Wanadoo into an independent unit a couple of years ago, remains the major shareholder.

The French aren’t the only ones waving a flag at AOL. Rumours abound that Deutsche Telekom AG remains interested, even if Chairman and CEO Kai-Uwe Ricke denied holding talks to acquire the Internet company at a news conference in November.

Rumours of T-Online AG & Co. KG going shopping for ISPs have flourished since the German Internet company confirmed surplus capital of more than four billion euros (US$4.7 billion) days before the news conference with Ricke. Helping fuel speculation, T-Online CEO Thomas Holtrop said some of that money will be used for acquisitions in the months ahead.

“We are generally interested in increasing our market presence in Europe and are taking steps in this direction,” said T-Online spokesman Michael Schlechtriem, pointing to the December acquisition of Swiss ISP Scout25 AG.

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