Excite Inc has registered for its third public share offering, this time to pay for the deal it signed recently with Netscape Communications Corp, whereby Excite will provide a Netscape- branded search engine and jointly develop some channels for Netscape’s Netcaster web site. Under that deal, Excite has to give Netscape $70m of the guaranteed revenues up front, which it hopes to get back through advertising revenues, weighted in favor of Excite at least until the money is recovered. Excite is offering 1.35 million shares, 1.23 million of them new, with 177,500 offered by existing shareholders. It expects to raise net proceeds of about $68.8m form its new shares at an assumed offer price of $59.9375 (one-sixteenth below yesterday’s closing price); obviously it will not get anything from the stock sold by shareholders. Last week the company said in a separate filing that it had borrowed $50m from partner and major shareholder Intuit Inc and will pay the remaining $20m to Netscape itself by June 30. Yesterday’s offering will pay back the debt to Intuit and most of the remaining owed to Netscape. The selling shareholders are all executives of the company, including president and CEO George Bell; executive VP and CFO Bob Hood and Joe Kraus, co-founder and senior VP, though none of them are selling significant amounts of their holdings. The offer is being managed by Morgan Stanley & Co and BancAmerica Robertson Stephens. The scale of the offering perhaps gives an indication of just how tightly Excite has hitched its wagon to that of Netscape, advisably or not.
