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Technology Stocks : PSIX up 26.5%, Takeover(?) -- Ignore unavailable to you. Want to Upgrade?

To: JAMES P. McVEIGH who wrote (1849)	1/22/1998 5:15:00 PM
From: Ken Turetzky	Respond to of 5650

Here's the next part: =PSINet -3: Former Digex CEO Opposed To IXC Alliance Dow Jones News Service via Dow Jones Under the terms of the planned alliance between PSINet and IXC, IXC would provide 10,000 OC-48-equivalent route miles on its nationwide fiber network for a 20-year term in exchange for 20% of PSINet's common shares. USinternetworking's McCleary said that in his original proposal, he asked PSINet to postpone Friday's shareholder vote on the IXC deal by at least 120 days and proposed to instead submit an alternative tender offer worth $10 a share for at least 51% of the company. McCleary's proposal is also contingent on obtaining necessary financing, but he said he believes he can put the financing together quickly. McCleary said he believes the deal with IXC would be highly dilutive to PSINet's shareholders. The terms of the deal state that if IXC's stake in PSINet is worth less than $240 million one year after IXC delivers the fiber capacity, PSINet will give IXC cash or additional stock to return the value to that level. McCleary is also concerned that the agreement establishes a predetermined price for bandwidth because he expects the price of bandwidth to fall at the end of the year. He added that since fiber prices move around, it is important to have flexibility in these types of deals. But PSINet Chief Financial Officer Edward Postal maintained that the deal with IXC is a fair one and noted that two very similar, large bandwidth deals have been struck since PSINet reached its agreement with IXC. He added that McCleary's proposal would require PSINet to breach its agreement with IXC, which the company has decided is not in its best interest. In a press release earlier, PSINet said the alliance with IXC is an integral part of its business plan and that the company "remains enthusiastic about that plan."

To: JAMES P. McVEIGH who wrote (1849)	1/22/1998 5:44:00 PM
From: Ken Turetzky	Read Replies (1) \| Respond to of 5650

McCleary "Perplexed" By Lack Of PSINet Response Federal Filings via Dow Jones FORM TYPE: BusWire ISSUER: PSINET INC. SYMBOL: PSIX WASHINGTON--(BUSINESS WIRE)--Jan. 22, 1998--"USi and our investors are perplexed by the lack of response by the PSINet Inc. board of directors," explained USi Chairman and CEO Christopher McCleary. "With their stock performing this poorly, the PSINet board should have a heightened sensitivity to carefully reviewing all opportunities to enhance shareholder value." USi recently submitted a formal request to the board of directors of PSINet to delay a Special Shareholder Meeting scheduled for Friday, Jan. 23, 1998. PSINet was seeking shareholder approval to issue 10 million additional common shares of PSIX to IXC Communications Inc. in exchange for fiber capacity. The postponement was requested by USi to allow USi to prepare the necessary SEC filings to contact the shareholders of PSINet directly to offer them $10 per share as an alternative. PSINet, in a press release issued today, declined to consider the USi proposal. "It is one thing to decline our proposal," explained McCleary. "But the fact that PSINet made no attempt to contact us and our financial advisors, Friedman, Billings, Ramsey, and Co. Inc., to arrange a meeting to discuss the details of our proposal is extremely perplexing." "How does the PSINet board know if USi would be prepared to increase the offer if they refuse to contact us to arrange a meeting?" McCleary further added. "It is a sad day for PSINet shareholders." USinternetworking Inc., headquartered in Washington, is a Delaware corporation formed to pursue the acquisition of private and public companies engaged in the provision of Internetworking services in the U.S. McCleary, chairman and chief executive officer, was formerly chairman and CEO of DIGEX Inc. until the completion of DIGEX's merger into Intermedia Communications Inc. late in 1997. CONTACT: USinternetworking Inc. Christopher S. McCleary, chairman and CEO, 888/410-1123 www.usinternetworking.com