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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: Art Baeckel who wrote (21227)	8/3/2000 11:35:18 AM
From: Art Baeckel	Read Replies (1) \| Respond to of 22640

AOL-LA IPO now expected to price on Thursday Reuters Company News - August 03, 2000 09:19 Copyright 2000 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. Jump to first matched term NEW YORK, Aug 3 (Reuters) - The initial public offering of America Online Latin America Inc., a joint venture between America Online Inc. and the Venezuelan media giant Cisneros Group, is expected to price after the stock market close on Thursday, one of the deal's underwriters said. The pricing had been expected earlier this week. On Tuesday the expected price range on the IPO was cut to $8 to $10 a share from $15 to $17. The 25 million-share offering is now expected to raise up to $250 million, compared with previous expectations of $425 million. The deal faced lukewarm investor interest at the higher price range amid scepticism over Fort Lauderdale, Fla.-based AOL-LA's prospects in the region. The depressed state of the IPO market, especially for business-to-consumer deals, did not help. The IPO underwriters include Salomon Smith Barney and Donaldson Lufkin Jenrette, which disclosed the planned Thursday pricing. AOL has faced criticism from analysts who have said the powerhouse Internet access provider has been slow to build its brand overseas, especially in Latin America, where local players, often backed by media and telecommunications giants, have become entrenched. Among AOL-LA's rivals are Universo Online SA, which leads the pack in Brazil, the region's largest and most developed Internet market; Terra Networks SA and Telefonos de Mexico . AOL-LA had about 129,000 subscribers in Brazil as of June 25. "They certainly arrived late. But on the other hand, the market in Brazil is a small fraction of what it's going to be in a few years," said Jupiter Communications analyst Lucas Graves. Of the 67 million users in the region expected online by 2005, only 16 million will be online at the end of 2000, he said. AOL-LA started service in Brazil last year and in Mexico last month. It is expected to launch its Argentine service this month. It had a net loss of $51.2 million on revenues of $5.2 million for the nine months ended March 31. The company's decision to stick to its pay service despite the prevalence of free Internet access in the Latin American market has sparked criticism. While the verdict may still be out on whether free access is viable, analysts believe it is a force AOL will have to reckon with because it depresses prices in the market. AOL executives have argued that once new users get a taste of its service, they will prefer it because of its ease of use. To build its brand, AOL Mexico formed several marketing partnerships earlier this week with Wal-Mart Mexico, Blockbuster Inc. , Sony and Tower Records.