PARIS (Thomson Financial) - Neuf Cegetel is in exclusive talks with Deutsche Telekom AG to buy its French internet service provider unit, Club Internet, a source close to the matter told Agence France-Presse.
On April 16, Neuf Cegetel denied that a deal had already been struck following a press report claiming it had succeeded with a bid of 430-460 mln eur.
The same report said Neuf beat Iliad unit Free, which had bid 380-400 mln eur and prompted a surge in Neuf's shares which, based on Friday's closing price, it has hung on to.
Club Internet, which Deutsche Telekom acquired in 2000 from Lagardere ScA made a gross operating loss of around 100 mln eur in 2006.
It has over 500,000 broadband subscribers and would make Neuf the second largest ISP, overtaking Free to sit behind France Telecom's Orange.
Neuf currently has 2.17 mln ADSl clients, behind Orange with 5.92 mln and Free with 2.27 mln.
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