Wow! The ultimate in insider sales, these guys are in way over their heads as far as the business goes, but they are smart enough to know how to come out on top. How many times book can they get for the company? How much of the 100 million (was it that much I don't remember, INTU is paying 35 million for a much bigger deal) have they paid AOL?
<http://biz.yahoo.com/finance/980220/tel_save_t_2.html>
Tel-Save CEO sees sale decision by end Q1
NEW YORK, Feb 20 (Reuters) - Tel-Save Holdings Inc will decide by the end of the first quarter whether to sell out to one of
several suitors or go it alone as an independent, company chairman and chief executive Dan Borislow said Friday.
''By the end of this quarter we will have an agreement to be sold at a premium,'' Borislow told Reuters shortly after Tel-Save said it
had retained Salomon Smith Barney for advice on the possible sale of the company. ''If we don't have one by then, we'll stay
independent.''
One of the big factors driving interest in a sale has been the success of its long-distance marketing pact with America Online (AOL
- news), Borislow said. As many as 13,000 new customers per day are signing up for Tel-Save's 9-cents-per-minute long distance
service through ads that appear on AOL.
''We clearly stole something here from the Big 3 or 4,'' he said, referring to the titans of the long distance business - AT&T Corp (T
- news), MCI Communications Corp (MCIC - news), Sprint Corp (FON - news) and WorldCom Inc (WCOM - news). ''Now might be
an opportunity for someone to take it back.''
Given the volume and growth potential from the AOL deal, which was augmented two weeks ago by a similar pact with
CompuServe Corp (now owned by AOL), ''It might be better suited to a larger company than ours,'' Borislow said.
Borislow has often said he believes his company needs to be a bigger organization, either on its own or through a merger or
strategic partnership, in order to compete effectively in the rapidly consolidating telecommunications business.
''It doesn't make sense to do it alone,'' he said Friday. ''There's a lot of efficiencies to be gained by being larger. In
telecommunications business, you can't just be a long distance provider or just local or just Internet. You have to be all things to
everybody, and you need to be bigger to do that.''
In its news release earlier Friday, Tel-Save said it remained in talks with several potential suitors, reiterating a statement first made
Feb. 6. With the inclusion of Salomon Smith Barney, however, the pace is quickening.
''We want to know how sincere their interest is,'' Borislow said of the companies expressing interest.
News of Tel-Save's move to retain investment banking advisers touched off a trading frenzy in its stock. More than two million
shares changed hands in the first 30 minutes after the announcement, and the stock briefly hit 30, up more than 20 percent from its
Thursday close of 24-25/32 and above its previous 52-week high of 27-5/8 recorded last month.
By 1515 EST/2015 GMT its shares were up 3-11/32 at 28-1/8 on a volume approaching five million shares. |
