Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Broadcast.com (Acquired by Yahoo) -- Ignore unavailable to you. Want to Upgrade?

To: B. A. Marlow who wrote (1071)	3/31/1999 6:58:00 PM
From: Sleeper	Read Replies (1) \| Respond to of 1260

Yahoo, Broadcast.com seen close to $5.7 billion merger By Bambi Francisco, CBS MarketWatch Last Update: 6:39 PM ET Mar 31, 1999 Silicon Stocks Net Stocks SAN FRANCISCO (CBS.MW) -- Yahoo will acquire Broadcast.com for $5.7 billion in stock in the second-biggest cyber marriage ever, according to news reports. Yahoo (YHOO) made no formal announcement but sent a fax to analysts saying it would host a conference call Thursday at 8:30 a.m. Eastern time. A second note said: "Yahoo broadcasts their news announcement live on the Internet via Broadcast.com." The value of the transaction is $5.7 billion, according to Dow Jones Newswires. That would be equal to about $129 a share, reflecting a 52 percent premium over the stock's value just 10 days ago. Yahoo's market capitalization at the close of trading Wednesday was some $39 billion. Rumor-driven run-up Word that Yahoo was courting Broadcast.com first emerged more than a week ago. Shares of Broadcast.com spiked to 116 1/2 on March 22 after closing at 85 in the prior session. That gave Broadcast.com a $3.9 billion market valuation. Yahoo stock slipped 5 to 165 that day. On Wednesday, Broadcast.com (BCST) rose 4 13/16 to 118 3/16, more than a dollar more than the reported bid. In after-hours trading, the stock ran up to 125 before being halted at 4:36 p.m. Eastern time. Shares of Yahoo fell 3 15/16 to close at 168 3/8 Wednesday and were also halted in after-hours trading on Instinet. The purchase would trail only America Online's (AOL) $9.4 billion takeover of Netscape (NSCP) and AtHome's (ATHM) acquisition of Excite (XCIT), which is currently valued at $5.5 billion, according to CommScan EquiDesk. The expected acquisition announcement Thursday could precipitate another surge among Internet stocks; big acquisitions often fuel expectations of more acquisitions. This would be Yahoo's second major acquisition during the quarter. Its $3.8 billion buy of GeoCities, announced Jan. 28, is expected to close in April. Multimedia streaming Broadcast.com has established itself as the dominant portal for multimedia audio and video content over the Internet. As a branded product offering under the Yahoo umbrella, Broadcast.com would significantly enhance Yahoo's service offerings. Analysts had been concerned that Yahoo would stretch itself thinly as it tried to create such services internally. Investment bankers have noted that Broadcast.com was in a better negotiating position and that Yahoo would have to pay a rich price. Broadcast.com is the leader in offering so-called rich media content, which is widely seen as the next wave for the Internet. Last week, Yahoo's chairman and CEO, Tim Koogle, said that buying growth, buying market share and buying brand are key for the portal, even if that requires some dilution of the company's rich stock valuation. Price point While many agreed that the combination is strategic and logical, the price Yahoo's willing to pay could present a stumbling block. Koogle, who had declined to comment on whether his company was courting Broadcast.com, told CBS.MarketWatch.com that he's focused on strategic acquisitions and will pay up only if "we can make the numbers work." He said that Yahoo will "buy growth and buy accretion." But Koogle's definition of accretion means not squeezing out profits for some time. "We try to make deals that turn neutral to accretive within three to nine months." "If we're numbering these companies five to 10 years from now, as long as it's accretive in two to three years, I'll be happy," said Bruce Smith, an Internet analyst at Jefferies & Co. "It's not important whether there's any immediate negative impact on earnings."