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Strategies & Market Trends : Angels of Alchemy -- Ignore unavailable to you. Want to Upgrade?

To: Rick Buskey who wrote (14387)	9/27/2000 11:08:32 PM
From: ColtonGang	Read Replies (1) \| Respond to of 24256

Exodus Communications Revives $6.5 Billion GlobalCenter Bid, People Say By George Stein Santa Clara, California, Sept. 27 (Bloomberg) -- Exodus Communications Inc. revived a $6.5 billion bid for Global Crossing Ltd.'s GlobalCenter Inc. after WorldCom Inc. snatched away a rival Web-hosting company, people familiar with the situation said. The GlobalCenter transaction, which could be announced today after the Exodus and Global Crossing boards vote, will create the world's largest Web-hosting company and allow Exodus to plug into Global Crossing's worldwide network through a 10-year, $4 billion contract, the people said. The Exodus network contract will match access that the WorldCom system will provide Digex Inc., the people said. The $6 billion WorldCom-Digex transaction, announced on Sept. 5, left Exodus as the only major Web-hosting company without a partner that owns a global voice and data network, exposing it to price increases. Exodus and Global Crossing both bid for Digex. ``Without Digex being available, Exodus probably said we should rethink our strategy and Global Crossing is a part of that,'' said Tom Burnett, president of Merger Insight, which tracks mergers and acquisitions. The Exodus-Global Crossing talks were reported earlier by Dow Jones. The companies declined to comment. ``At this point, it's a rumor and it's our company policy not to comment on rumors or speculation,'' said Exodus Communications spokeswoman Maureen O'Connell. Global Crossing spokesman George Sard said, ``I have no comment.'' Global Crossing would become Exodus's largest shareholder with a 20 percent stake and gain a seat on the Exodus board, the people said. The network contract requires Exodus to use the Global Crossing network for at least half of all its needs outside of Asia, where it's to use the network for at least two thirds of its requirements, the people said. Exodus and Asia Global Crossing Ltd., a joint venture owned by Global Crossing, Microsoft Corp. and Softbank Corp., plan to set up a joint venture, the people said. Asia Global Crossing is planning an initial public offering next week. In July, Global Crossing ended talks to sell its GlobalCenter because the $6.6 billion in stock Exodus offered was too low, people familiar with the discussions said at the time. Global Crossing then decided to proceed with plans for an initial public offering of GlobalCenter tracking shares, detouring at the beginning of the month for its unsuccessful bid for Digex. Exodus, based in Santa-Clara, California, sells Web-hosting services to more than 2,000 businesses. It owns buildings that house the servers - the powerful computers that run Web sites -- alleviating companies of the responsibility of making sure their sites don't go down and owning the hardware. Adding Global Center's customers would increase usage of Exodus's data centers, boosting profits as well as revenue. Global Crossing got into the Web-hosting business when it acquired Frontier Corp. for $10.4 billion in September. It has since faced tougher competition and higher capital costs. Web hosting requires secure, reliable data centers to support Web sites increasingly used for complex, confidential transactions and record-keeping. Global Crossing will be able to avoid $1 billion in outlays to build data centers around the world over the next few years by selling GlobalCenter to Exodus, the people said.