Struggling Drkoop.com Gets Second Buyout Offer

FRAMINGHAM (07/26/2000) - Floundering online medical information provider Drkoop.com Inc. Tuesday got its second buyout offer in less than a week, this one from little-known Undertherapy.com -- a Beverly Hills, Calif., company that's setting up an Internet-based information service for health care professionals.

But Austin, Texas-based Drkoop issued a blistering response to Undertherapy's unsolicited offer. Drkoop said it already rejected two earlier proposals from Undertherapy after deciding they weren't "in the best interests of the company or its stockholders."

In addition, Drkoop claimed that Undertherapy violated a confidentiality agreement between the two companies by going public with its offer.

Nonetheless, Drkoop said the offer will be forwarded to its financial and legal advisors for analysis and then considered by its board of directors.

The offer from Undertherapy follows one announced last Friday by Reston, Va.-based MillenniumHealth Communications Inc., another relatively unknown company that operates a health care news service and an online marketplace for buying and selling medical equipment. Neither company disclosed the proposed financial terms of their bids for Drkoop.

In a response to the MillenniumHealth offer, Drkoop said it was "highly premature" to predict whether a deal would result.

The two offers come in the wake of a filing to the Securities and Exchange Commission last week in which Drkoop said that two of its top executives are leaving and warned that it expects to report a second-quarter loss on revenue of just US$2.5 million to $3 million. But the company is also seeking additional financing that would allow it to continue operating independently.

Meanwhile, HealthCentral.com -- an online medical information provider in Emeryville, Calif. -- Tuesday announced a deal to acquire struggling online drugstore DrugEmporium.com in Columbus, Ohio, from parent company Drug Emporium Inc. Drug Emporium executives had said in May that they were negotiating a possible merger between DrugEmporium.com and Drkoop.

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