Freeserve, the Internet business of Dixons, the electronics retailer, will be valued between £1.31 billion and £1.51 billion sterling when it floats on the UK stock market, according to the flotation prospectus.

The share offering - with shares to be priced between 130p and 150p - will be open to members of the British public and international institutional investors.

Dixons said more than 114,000 individuals had already registered to receive a copy of the mini-prospectus and an application form for the offer.

Another 24,000 Dixons and Freeserve employees are also automatically entitled to apply for the shares.

The prospectus was published yesterday and the final offer price and number of shares available to the public, Freeserve members and employees are expected to be announced on July 26th.

Since Freeserve's inception last September, the business has attracted 1.32 million users and generated revenues of £2.73 million. In the period to May 1st, however, the service incurred losses of £1.04 million.

The price range for the flotation valuing Freeserve at up to £1.51 billion falls below the expectations of some analysts, who had said earlier it was worth as much as £3 billion. Dixons' shares fell 22p to £12.65 after details of the flotation were announced.

The flotation will see Dixons sell off 20 per cent of Freeserve, with 1.75 per cent of the share capital being sold to telecommunications group Energis, which provides systems and modem support to the Internet business.

Shares will start being traded on August 2nd.

Dixons said if demand from members of the public exceeded the allocation of shares to retail investors, preferential allocation would be given to registered users of Freeserve and to eligible Dixons and Freeserve employees.

Freeserve, which is the first large-scale Internet company to be floated in the UK, offers users free Internet access, including e-mail, personal Web space and ecommerce.

The company also intends to float Freeserve on the Nasdaq stock market in the US where Internet stocks such as Yahoo! and America Online have boomed.