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To: Boplicity who wrote (2932)	7/18/2001 9:29:44 AM
From: Venkie	Read Replies (1) \| Respond to of 13815

Exodus target of WorldCom $2 Billion buyout rumor Combination of largest web hosting leaders to will create a powerhouse; first to offer customers a new class of interactive value hosting solutions New York NY, July 18 -- Shares of Exodus Communications, Inc. (Nasdaq: EXDS) got 10% boost on July 16 as rumors spread through the investment community that giant WoldCom Group was considering purchasing the Santa Clara based company. The combined entity will be a unique force in the web hosting market and the first to offer a unified platform for Internet-based commerce and collaboration. This acquisition will underscore WorldComs strategic commitment to deliver next generation solutions for managing broad range of communications services and cover about 85% of US market. Recent sharp declines in Exodus share price has put the company in a position where it is considered to be a ripe candidate for an acquisition. The company has lost about 97% of its market value since August, primarily the result of warnings that sales and earnings figures would come in below expectations. On July 16, Exodus shares climbed 10% as high as $1.52 before closing the day up to $1.36 as nearly 22 million shares changed hands, more than twice the stock's average trading volume. Both companies, of course, declined to comment on the speculation. But George Kilosokis, money manager from Lehman Brothers, was quoted in Business Week Magazine's "Inside Wall Street" column as saying that Exodus was a potential acquisition candidate. The source also said Qwest Communications - which currently owns 4 percent of Exoodus - was prepared to increase its interest in the company, perhaps all the way to 100 percent. The other companiy that showed interest is ChoicePoint Inc. Based on the Exodus board of directors not approving offer on Aug 2000, George believes, WorldCom's offer has to be more than $2.2 billion which is relatively a small amount considering WorldCom's $45 billion market capitalization. ``As we've consistently stated in the past, we remain cautious on the sustainability of WCOM's long-term business fundamentals, primarily due to the lack of scale in both consumer and business end mile/local infrastructure,'' Lehman said. ``Exodus merger will minimize the competitive pressures that WoldCom was experiencing last two quarters. We currently rate WCOM as a high BBB.'' Still, it said, ``we reiterate our Buy recommendation on WCOM following this week's spread backup, strictly due to relative value.''