Note that IBM chose PRGY stock instead of cash for its debentures:
IBM holds 7.2 pct of Prodigy after note conversion
February 24, 1999 02:05 PM
(Recasts, adds IBM comments in paragraphs 2-5, SEC comment in paragraph 8)
WASHINGTON, Feb 24 (Reuters) - International Business Machines Corp. IBM said Wednesday in a Securities and Exchange Commission filing that it held a 7.2 percent stake, or 4,536,778 common shares, of Prodigy Communications Corp. PRGY .
IBM spokesman John Bukovinsky said the Armonk, N.Y., computer maker's stake in Prodigy was the result of converting debentures it received as part of its deal to sell Prodigy to a Mexican-led investor group in 1996.
Terms of that deal allowed IBM to convert the debentures it received into a stake of up to 7.5 percent in the company. Based on the valuation of the company around the time of Prodigy's public offering, IBM ended up receiving a 7.2 percent stake.
Bukovinsky said IBM's stake occurred "automatically as a result of the conditions that were part of the sale."
The spokesman said IBM had the option to convert its stake into cash or shares and elected to take Prodigy shares.
IBM disclosed its stake in the White Plains, N.Y., Internet service provider in a 13G filing with the SEC.
Those filings are usually made by institutions and large investors with passive investment objectives in a company. Unlike 13D filings, 13Gs do not include details such as when securities were bought or sold, or at what price.
SEC spokesman John Heine said that any company or individual who acquires a passive stake in excess of 5 percent of the controlled, or holding, securities of a company must file a 13G within 45 days of the close of the calendar year.
((Peter Ramjug at Washington newsroom, phone: 202-898-8399 Fax: 202 347-3853, E-Mail peter.ramjug@reuters.com))
REUTERS
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