Zapata said it would offer Excite shareholders $72 worth of newly issued Zapata common stock for each share of Excite common stock. Excite stock closed yesterday afternoon at 60.19, but rose 12 percent overnight to open at 67.63.
The unsolicited letter proposed that Excite negotiate to acquire Zapata, a Texas-based company that owns fish-oil processing and food service operations. Excite has rejected the proposal outlined in the letter.
"We reviewed the letter, and the proposal holds no merit and we think that it is a publicity stunt," said Heather Gore, an Excite spokeswoman. "There is no synergy between the two companies, and it doesn't make sense."
Excite received the letter yesterday afternoon via fax, Gore said, noting that the Internet directory company and Zapata have not spoken since Excite issued its announcement that it rejected the offer.
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Zapata, for its part, said in a statement that "this transaction represents an excellent fit with Zapata's new strategic direction because of Excite's leading edge Internet technology, media properties, and its high-quality management."
The letter stated that Zapata would pursue a transaction with Excite only on a friendly basis and with the approval and support of Excite's board of directors.
Excite recently reported that about 23.4 million shares of its common stock were outstanding as of April 30, 1998. Based on yesterday's closing price of 60.19, the company's market capitalization is $1.4 billion.
In April, Zapata announced plans to initiate a strategic thrust to acquire and consolidate Internet and e-mail commerce business. Zapata also recently announced plans to change its name to ZAP Corporation
Zapata detailed its new strategy in its proposal letter to George Bell, Excite's president and chief executive officer.
Houston, Texas-based Zapata said that it owns 64 percent of Omega Protein, a marine protein company in the U.S., and owns 40 percent of Envirodyne Industries, a food packaging company.
Malcolm I. Glazer, the owner of the Tampa Bay Buccaneers NFL football team, has served as a director of Zapata since July 1993, and has been the chairman of the company's board since July 1994. Glazer served as president and chief executive of Zapata from August 1994 until March 1995.