CompuServe approves mergers
As expected, CompuServe shareholders approve a merger with WorldCom and America Online.
CompuServe shareholders in favor of the mergers represented 89.7 percent of investors in the online service and the backbone operator, said Steve Conway, a CompuServe spokesman.
Closing documents for the deal are expected to to be signed as early as this weekend.
Under the terms of the mergers, CompuServe's online operations will be combined with those of AOL, and its backbone network will be absorbed by WorldCom.
Conway said he does not yet know about the future of CompuServe's executive management team, or about whether the company's workforce will be cut once the mergers are completed.
"That won't be announced until after the closing," he said.
AOL reportedly is proposing laying off more than 300 CompuServe customer support employees, or more than 20 percent of the company's total workforce.
Citing executives familiar with the merger negotiations, the Wall Street Journal said today that the proposal is part of AOL's effort to reduce costs once the two operations are combined.
An AOL spokeswoman would not confirm the published report.
"Until we close, no final decisions have been made," she said. "We haven't been able to complete a thorough review. We're committed to continuing to build the CompuServe brand as a separate service on its own network."
The companies announced in September that WorldCom would purchase CompuServe from its majority stockholder H&R Block (HRB) in a $1.2 billion stock deal.
WorldCom said it would then spin off CompuServe's interactive services division to AOL, and also would pay AOL $175 million for its ANS Communications, a network service provider.
The transactions are designed to bolster WorldCom's backbone presence and boost AOL's online services.
NEWS.COM Internet News Editor Jeff Pelline and Reuters contributed to this report.