Excite@Home, the leading US provider of high-speed Internet access over cable television lines, said it will sell its broadband business to AT&T Corp for US$307 million in cash and file for bankruptcy protection.
Under the agreement, the once high-flying company's network would become a part of AT&T, which already has a controlling interest in Excite@Home. Friday's deal is subject to a bankruptcy judge's approval.
The bankruptcy filing, expected late Friday in San Francisco, will not result in any service disruptions to Excite@Home's 3.7 million subscribers, the companies said.
"This filing is a tool to protect the value of the broadband business for the benefit of the company's financial stakeholders and will help reassure our customers that service will continue uninterrupted through the restructuring process," said Patti Hart, Excite@Home's chief executive.
The directors of both AT&T and Excite@Home approved the asset-purchase agreement. The deal, however, could be canceled if higher and better offers are received.
In a statement, AT&T said it plans to build on the assets it acquires to develop a more robust network.
The announcement is the latest development in the spectacular rise and fall of Redwood City, California-based ExciteAtHome.
At the height of the Internet boom in 1999, At Home Corp merged with the portal Excite Inc in a US$6.7 billion merger. Executives at the time believed the company would someday rival America Online.
But the bubble burst and advertising revenue dwindled.
After losing US$7.4 billion in fiscal 2000, Excite@Home said in April it needed to raise US$75 million to US$80 million to make it through 2001. The company restructured its fiber-optic network lease deal with AT&T and sold US$100 million in notes. But Excite@Home said in July it needed more cash to stay in business.
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