AOL, Time Warner soar in pre-market trade
LONDON, Jan 10 (Reuters) - Shares in U.S. online service provider America Online
(NYSE:AOL - news) rocketed nearly 19 percent in pre-market trade on Instinet following a
report it was set to announce a merger with media giant Time Warner Inc. (NYSE:TWX -
news).
''There is very active trading in AOL,'' an Instinet trader said.
AOL was trading at 87 dollars per share, up from its New York close of 72-7/8 on Friday, Instinet said.
It added that Time Warner was indicated at 73 dollars per share, up 12 percent from its New York close at 64-3/4, but no
actual trades had yet taken place.
Dow Jones Newswires reported that the two companies were expected to announce a stock-for-stock merger early Monday,
citing unnamed people familiar with the situation.
News of the report sent European media shares sharply higher, making the sector the top gainer in Europe.
Instinet said shares in Pearson (quote from Yahoo! UK & Ireland: PSON.L) were among those showing strong reaction to the
merger story.
Pearson was up 8.17 percent on the London Stock Exchange.
''If this story is confirmed, it gives rise to a formidable combination of Internet eyeballs and content,'' WestLB Panmure said in a
strategy note.
WestLB said the deal points to the prospect of accelerated consolidation in the sector, and was a wake-up call for the Internet
access providers all over the world.
"We would expect a flurry of rumours and some deals," WestLB
said.
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