Microsoft Corp. co-founder Paul Allen has failed to follow through on his plans to buy a majority stake in Internet directory Go2Net Inc.
Although Allen was not able to secure a majority stake in the company, he is expected to wind up owning 34 percent of Go2Net’s outstanding shares, according to published reports.
On March 15, he purchased 300,000 shares of series A convertible preferred stock from Go2Net for $300 million and another 1.4 million common shares from Go2Net executives and directors at $90 each, or $126.3 million. He also made a tender offer to Go2Net shareholders for 3.6 million shares for $90 each, or $323.7 million.
According to Go2Net’s annual report, Allen’s offer expired April 15 with no shares tendered. That makes Allen’s total investment in Go2Net worth $426 million.
Allen was hoping to make the Go2Net directory a launching pad for the high-speed Internet services his cable properties will offer.
Since Allen started purchasing Go2Net shares, the stock has soared almost eightfold.