Microsoft Corp’s co-founder Paul Allen has added a web portal to his evolving plans for an integrated high-speed internet service by agreeing to take a majority stake in Go2Net for roughly $750m. Go2Net said that Allen will pay $300m for new convertible preferred stock in the company and intends to buy $450m worth of existing common stock at $90 per share – a slight premium over last Friday’s Nasdaq closing price of $87 – which would give him 54% of the Seattle-based company. The deal adds to Allen’s growing stable of new media investments and will see Go2Net work with his affiliated cable companies to provide their subscribers with access to the company’s portal services.
Sweden’s leading telecommunications operator, Telia AB announced it was on the verge of merging with its Norwegian counterpart Telenor AS in a deal that will be finalized next week. The 2.5 billion Swedish Krone ($312.5m) revenues of Telia IT Services, the services arm of the Swedish telco, will be augmented by Telenor’s services sales of 3.5 billion SK ($437.5m), elevating the combine into the top tier of Scandinavian services firms.
Global Crossing, the Bermuda-based independent telecommunications start-up building a fiber optic network around the world, jumped into the US telecoms market by buying the fifth largest long distance carrier Frontier Corp for $11.2bn. Global Crossing will pay $62 a share in stock, roughly a 40% premium on Rochester, NY-based Frontier’s shares which closed at $44.50 last Tuesday. Frontier has about 171.61 million shares outstanding. With the acquisition of Frontier it will gain a coast-to-coast US fiber optic network to connect to its own for wholesale resale. It also enters the corporate retail market with a whole range of established services.
IBM expanded the range of financial support available to its IT resellers, to give them greater flexibility and access to loans for acquisition funds. Catalyst Solutions, a Frimley, UK-based IT services company which began life as an IBM partner for its AS-400 platform, has extended that relationship to take advantage of this war chest and share the costs of acquiring Datel Advanced Systems, another UK-based IT supplier. The financial package is worth 8 m pounds, the majority of which is in cash. IBM has funded its distribution channels previously, but never to buy other companies. Finance has traditionally taken place in leasing equipment, building inventory and subsidizing accounts receivable.
