T-Online, Excite in talks

May 23, 2001
Web posted at: 0629 GMT

LONDON (CNN) -- Europe's largest Internet service provider T-Online is interested in Excite@Home's European portal business, a report said on Wednesday.

Talks have been exploratory so far and T-Online hasn't decided whether to open full negotiations, The Wall Street Journal reported, citing people close to both companies.

The acquisition would give Germany's T-Online, a unit of Deutsche Telekom (FTDE), a boost in casting its net across Europe, where it already has subsidiaries in Spain, France and Austria.

A buyout of Excite Europe couldn't come soon enough for the U.S. parent Excite@Home (ATHM: Research, Estimates), which is battling a cash crunch, falling advertising-related sales, and declining morale in the U.S. amid hundreds of layoffs.

T-Online and Excite Europe declined to comment on any potential negotiations, the report said.

Buying Excite Europe would give T-Online access to the U.K., the Netherlands, and Italy. But there would be some overlap in Spain and France, where T-Online operates ya.com and Club Internet respectively, the report said.

European competition authorities would also likely force T-Online to dispose of Excite's German activities if a deal went ahead, the report said.

T-Online (ATOI) also isn't the only suitor that has approached the European subsidiary of the U.S. Internet service, according to the WSJ.

T-Online is currently focused on becoming profitable. Its preliminary unaudited results for the first quarter were released earlier this month.

The earnings report showed a loss after interest, taxes, depreciation and amortization of 66.4 million ($59 million), attributable in part to losses in its international businesses.

Revenue from Internet access charges rose sharply, but advertising and e-commerce revenues were down.

T
Online loses $116 million – Jan. 24, 2001
Excite at home stake kept – May 18, 2001

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