Just days after laying off 500 staff [WAMN: 26-Sep-01], broadband internet provider Exite@Home on Friday filed for Chapter 11 bankruptcy protection.
The company plans to sell its network assets to AT&T, which holds a controlling stake in Excite, for $307 million, though the deal is subject to approval by the San Francisco bankruptcy court and may be trumped by other bidders.
With around 3.7m subscribers, Excite is America’s largest provider of cable-based web access. Over 1.5m of its users subscribe to AT&T Broadband, AT&T’s cable division, which is eager to fuel long-term growth by supplying internet connections.
As a failsafe measure, should it not succeed in acquiring Excite’s assets, AT&T is reportedly pushing ahead with plans to build its own cable-modem network, which could form a backup to that of Excite if the deal is successful. It is unknown whether the bankrupt firm’s network would become part of AT&T Broadband – which may be sold off – or its parent. AT&T’s second network will, it is thought, be part of AT&T, not its cable unit.
Excite has $150m to prolong operations until it has sold off its assets. It is also hunting a buyer for its Excite.com website.
News source: Wall Street Journal