CompuServe stock up on rumors
Shares of CompuServe jump 12 percent on speculation that America Online has renewed its buyout bid.
CompuServe closed at 12-1/16, up from 1-5/16 on Friday.
According to the Wall Street Journal, H&R Block, which holds an 80 percent stake in CompuServe and is admittedly looking to sell, turned down AOL's latest bid of about $1 billion in stock, which is comparable to its last offer.
But the report also said AOL may be getting help in its efforts from German partner Bertelsmann, which is kicking in some cash to beef up the previous offer to CompuServe.
New suitors also appear to be at CompuServe's door, with a New York investment firm reportedly extending an offer that may rival AOL's bid.
Investment firm Welsh, Carson, Anderson & Stowe is among the companies mentioned as a possible suitor. The CompuServe board also rejected the investment firm's offer because it required the tax-preparer company to retain a minority stake in CompuServe, according to the Journal.
Earlier this year, AOL and CompuServe were close to striking a deal that later fell through when a tax policy change was on the table in Congress, a source close to the deal told CNET's NEWS.COM in an earlier interview. The policy would have increased the cost of the deal by hundreds of millions of dollars.
Although at the time the two camps looked at breaking away CompuServe's successful network services division from its slow-growing online operations, the two divisions were too closely intertwined to make the process easy and the idea was dropped, the source said.
CompuServe's revenues have been flat for more than a year and its stock price has been virtually comatose for the last nine months--hovering around the $10-a-share range.
The No. 2 online service also last month posted a wider-than-expected fourth-quarter loss of $18 million. The company posted sagging revenues of $208 million, down 3.4 percent from a year ago. Its revenues have also fallen for the last three consecutive quarters.