GlobalNetFinancial.com, Telescan Merge
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[London, ENGLAND] GlobalNetFinancial.com, Inc., which provides the financial channel for Freeserve in the U.K., announced Thursday a $332 million merger with IT Internet services provider Telescan, Inc.
The combined company, called GlobalNetFinancial.com, will be headed by personnel from the Telescan camp, with Board member William D. Savoy becoming chairman, and Lee Barba, currently chief executive of Telescan, becoming chief executive of the enlarged group. GlobalNetFinancial's current Chairman and CEO Stanley Hollander will serve as vice-chairman.
The merger, which has been agreed by both parties and now requires only shareholder approval, brings together two companies worth $332 million, based on closing prices on August 16, 2000.
Each share in Telescan will be exchanged for .50 shares of GlobalNet in a deal that is expected to be tax-free to shareholders. Telescan will surrender its 2.56 million shares of GlobalNetFinancial stock to Treasury when the merger is complete.
William D. Savoy, who is president of Paul G. Allen's investment vehicle Vulcan Ventures as well as being a board member of Telescan, noted that Telescan was one of Vulcan's first investments and said the merger would extend the reach of both companies.
"GlobalNet's business model is consistent with Vulcan's original investment premise -- that Internet financial services companies represent the fastest growing and potentially most rewarding markets on the Web by providing investors with the content and sophisticated analytics they need to help them better manage their money," said Savoy.
Stanley Hollander said the merger was the best option for creating long-term value for shareholders.
"We immediately acquire depth in management, a truly global footprint, operating and financial scale, and an opportunity to expand our early-mover advantage throughout Europe, especially in B2B," said Hollander.
Texas-based Telescan, through its Californian consumer division, manages the financial Web sites INVESTools.com and WallStreetCity.com. With other sites it has altogether 1.2 million users and over 50,000 paying subscribers, and provides co-branded services to America Online, American Express, Fidelity Investments, Forbes, NBC, and other companies.
Looking at the deal from the Telescan perspective, Lee Barba said the merger immediately puts Telescan and its IT businesses at the center of the European Internet expansion.
"We can uniquely serve investors' needs globally and do so with the most comprehensive suite of e-commerce transaction capabilities, delivered through multi-platform Internet access, including wireless and broadband," said Barba.
GlobalNetFinancial has paved the way in Europe for the enlarged company by becoming firmly established on Freeserve in the U.K., on World Online across Europe, and on Scandinavia's largest portal Scandinavia Online.
Recently GlobalNetFinancial launched the first of six interactive financial channels on Telewest's broadband digital television service, Active Digital. Separately it has an agreement with BT Europe for providing financial news and e-finance services to a potential base of 16 million mobile phone users.