1 share of NSCP = 0.9 share of AOL after 2/22/99 from CNET
Netscape buyout
vote in March
By Paul Festa
Staff Writer, CNET News.com
February 17, 1999, 6:30 p.m. PT
In a month's time, Netscape's
shareholders will vote on a
proposed acquisition by America
Online, armed with a detailed
dossier released today.
In a prospectus filed with the Securities
and Exchange Commission,
Netscape's board of directors asked
shareholders to accept a merger that
will give them .45 shares of AOL for
every Netscape share they hold, as
previously reported. Counting AOL's
stock split, which goes into effect
February 22, shareholders will get .9
shares of AOL for every Netscape
share.
Based on AOL's closing price of 153
today, Netscape officers and one of its
board members will hold a sizable
chunk of change.
Netscape shareholders will convene on
Wednesday, March 17, in Santa Clara,
California, to vote on the proposed
merger, which would make Netscape a
wholly owned subsidiary of AOL.
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The merger, however, is still subject to
approval by the Justice Department and
Federal Trade Commission approval.
The waiting period is expected to
expire February 28.
The proxy gives a brief glimpse into the
behind-the-scenes of the deal, which
began August 26.
While Netscape had long been on
AOL's list of firms for possible
investment or acquisition, emissaries
from the two companies first started
discussing the merger in late August,
according to the filing. AOL senior vice
president of corporate development
Miles Gilburne met with Peter Currie,
executive vice president and chief
administrative officer at Netscape, and
Mike Homer, head of Netscape's
Netcenter portal operation, at
Netscape's campus.
In early November, over the course of
three days, high-level talks including
Barksdale, Homer, and Andreessen
from Netscape and chief executive
Steve Case and chief operating officer
Bob Pittman from AOL were held,
culminating in a tentative agreement
reached November 17.
Should the deal go through, Netscape
cofounder James Clark will find
holdings in excess of 14.4 million
Netscape shares worth more than $993
million. And James Barksdale,
Netscape's CEO, will find his 5 million
shares worth about $351 million.
Meanwhile, Netscape cofounder Marc
Andreessen's 1 million shares are
valued at $70.8 million under the
merger deal. And Netscape director
John Doerr, who holds 429,750 shares,
will find his holdings worth $29.6
million under the transaction.
In justifying the merger to its
stockholders, Netscape cited
the company's prospects of
going it alone or joining forces
with other potential buyers or
investors.
The cost of the merger deal is
estimated between $50 million
to $70 million, including fees for
lawyers, investment banks,
accountants, and others involved
in the facilitating the transaction.
If the merger succeeds, Morgan
Stanley will earn more than $16
million for representing
Netscape in talks, according to
the prospectus.
Other costs are expected for
employee retention and "work
force reductions." AOL has kept
mum on possible layoffs. On the
retention front, the company has
pledged an extra month's salary
to Netscape employees who
choose to stay.
As previously reported,
Barksdale will take a seat on
AOL's board of directors.
Andreessen, Netscape's vice
president of products, will
become chief technology officer
at AOL. (See related story)
Other executives at Netscape
are negotiating positions with
AOL, according to the
prospectus.
The prospectus outlined some
details of Sun Microsystems'
involvement in the deal. Sun will
buy remote dial-up network
access services from AOL.
Sun revealed the nuts and bolts
of its billion-dollar deal with AOL
in a filing made public last week.
Related news stories
• Andreessen headed to AOL
February 17, 1999
• AOL-Netscape deal draws a
billion from Sun February 9,
1999
• The road to the AOL-Netscape
deal November 30, 1998 |
