The thing about rumors is that while the overall subject may come to pass, the details differ from reality. What I'm saying is that Compuserve will get bought out- but maybe not by AOL. My guess is MSFT network, why? HRB probably wants green stuff, why would they trade Compuserves equity for soon-to-be useless AOL stock?
Bill has the killer instinct, and will pay the premium to aquire Compuserve. And I'm sure AOL's PR machine will do anything to link it up to a story that might jump it's stock price.
Exerpt from WSJ:
If it became a reality, a purchase of CompuServe would help AOL, based in
Dulles, Va., remove a big competitor and boost its base of eight million
members by more than 25% -- CompuServe, based in Columbus, Ohio, has
2.9 million users -- creating an industry giant. At recent stock prices, an
acquirer could get CompuServe at a relative bargain: CompuServe's close
Tuesday was sharply below its 52-week high of $35.50.
But AOL would have to do some fancy footwork to raise cash for any deal,
if needed. The company, which had only $111 million in cash on hand as of
Dec. 31, isn't expected to have positive cash flow for several months,
making it difficult to support a debt offering. That would leave a stock
swap, AOL's favored method in past takeovers, as one of the most viable
options if it decided to make a bid.
Beyond financial issues, other hurdles would loom. Scrappy AOL, which
has long focused on the consumer market, could clash with CompuServe's
staid culture and its business-user base. Blending the technologies of the
two services also would be tricky. And such a combination could raise
antitrust concerns.
Further, AOL has long contended that growth of the on-line market will
depend on extending usage to millions of newcomers as cyberspace
becomes the mass medium of the 21st century; a bid for CompuServe could
raise questions about whether AOL still has faith in that scenario.
regards, John |
