Cable-based Internet service provider @Home Network has signed an agreement to purchase Internet search company Excite in an all-stock transaction valued at about $US6.7 billion, the companies said yesterday.
According to officials, under the terms of the agreement, 1.041902 shares of @Home's Series A common stock will be issued for each share of Excite stock.
The combined organisations will seek to speed adoption of broadband technologies by combining @Home's broadband technology platform, Internet backbone, and cable distribution agreements with Excite's Web portal and narrowband reach, they said. @Home has some 60 million cable distribution agreements worldwide, officials said.
Excite will become a subsidiary of @Home, and its chief executive officer, George Bell, will report to Tom Jermoluk, chairman and CEO of @Home Network, officials said. In addition, Bell will join the @Home Network board of directors.
Both companies' boards of directors have approved the transaction, expected to close in about three months. It is subject to approval by @Home and Excite's stockholders, as well as certain regulatory approvals, the companies said.
The agreement also provides @Home Network an option to buy a minority 19.9 per cent interest in Excite under certain circumstances, according to officials.
Excite had reportedly also been in talks over the weekend with rival Internet search provider Yahoo, according to several news reports, but those discussions were not fruitful. Excite reportedly also had been in talks with several other companies, including Microsoft and AT&T since America Online agreed to purchase Netscape Communications in November last year. AOL is one of the owners of Excite.