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AOL in talks to buy CompuServe

America Online is reportedly in talks to acquire rival online service CompuServe for around $1.2 billion.

America Online (AOL) is in talks to buy rival CompuServe (CSRV) for around $1.2 billion, the Wall Street Journal said today in its electronic edition.

Negotiators spent the weekend working on terms under which AOL would acquire CompuServe for a price in the range of $11 to $14 a share, or about $1.2 billion in America Online stock, the newspaper said.

Separately, a source familiar with the negotiations confirmed that the two companies were in talks. The source told CNET that AOL was interested primarily in CompuServe's private network.

At a $14 per share bid, AOL would have to issue about 26 million new shares to buy CompuServe from H&R Block, which owns 80 percent of the company.

Executives familiar with the talks said the companies hope to make a deal as early as this week, although the exact price might prove difficult to negotiate.

News of the possible merger leaked early last week. Later in the week, CompuServe said it was negotiating with an unnamed suitor, which rekindled reports of the deal.