ALERT TO ALL:
San Jose Mercury News: BREAKING NEWS...Posted at 1:35a.m.PST 1/22/99
AT&T MAY SELL WORLDNET TO @HOME!
New York--AT&T Corp. is considering selling its Internet-access business, including its WorldNet dial-up service, to AtHome Corp. in exchange for $1 billion in @Home stock, the Wall Street Journal reported Friday.
Under the terms of the deal being discussed, people familiar with the situation told the Journal that AT&T would retain control of WorldNet under its pending $40.9 billion takeover of Tele-Communications Inc.,expected to close in mid-February.
Currently, TCI holds about 28 percent of @Home's common shares, and if warrants and options are exercised TCI will control 58% of AtHome's voting stock.
People familiar with the situation told the paper they expected AT&T would keep voting control of @Home, a high-speed Internet, cable access service provider.
WorldNet is the No.2 online service, but lags well behind American Online Inc., which has 15 million customers.
AT&T would continue to operate the communications network used by WorldNet and would jointly market with AtHome, people familiar with the situation were quoted as saying.
AtHome, which agreed to buy Excite Inc. for $6.7 billion earlier this week, would take over WorldNet's 1.3 million residential customers and nearly one million business customers. WorldNet acquired the business customers in AT&T's recent $5 billion acquisition of International Business Machines Corp.'s global network.
The sources told the paper that the possibility of acquiring WorldNet was an important consideration in AtHome's deal for Excite.
In fact, AT&T Chairman C. Michael Armstrong was consulted about @Home's purchase of Excite throughout the negotiations, the sources told the paper.
But they cautioned that any deal was contingent on AT&T's acquisition of TCI. Any sale of WorldNet was not expected until the TCI deal was complete, they said.
Representatives at AT&T and @Home declined to comment on the matter to the paper.
Analysis from HK: Now that we know that 3com is sleeping with @Home the relationship between AT&T and 3com becomes tighter! It doesn't take a "Rocket Scientist" to see the implications. As I said in earlier posts, accumulate...accumulate....accumulate (3com)! I have suspected for a long time that 3com and AT&T may be... "Going To The Chapel To Get Married!" AT&T Management appears to be responding to the Lucent/Ascend "marriage"! The Elephants have been buying alot of 3com these past few days...could be in anticipation of this forthcoming development. LOAD UP.....THIS TRAIN IS ON ITS WAY UPWARD!
Question for anyone: Where does this leave CISCO? SHOULD I SHORT CISCO? JOE...if you're in Florida, put down the golf clubs...take a timeout...please post your comments!
HK
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