ExciteAtHome Rallies On Speculation Over AOL Deal
(Reuters) - Shares of ExciteAtHome Corp. surged more than $4 in heavy trading Wednesday on revived speculation that its largest shareholder AT&T Corp. was in talks to sell its stake in the high-speed Internet access company to America Online Inc.
ExciteAtHome rose 4-5/8, or 12 percent, to 43 on volume of 15 million shares in Nasdaq stock market trading. Meanwhile, America Online, the top Internet services provider, fell back 1-1/8 to 108-3/4 on the New York Stock Exchange, retreating from a more than $9 gain in the price of the stock Tuesday.
``The story we're hearing is AOL taking over AtHome from AT&T,'' one New York Stock Exchange trader said.
Spokesmen for AT&T and ExciteAtHome declined to comment. An AOL spokesman was not immediately available to comment.
AT&T owns roughly one-third of the stock of ExciteAtHome, but 58 percent of the voting shares.
In August, AT&T sought to dampen speculation that it was in talks with America Online on a potential deal that would give AOL access to AT&T's high-speed Internet access services running over its U.S. cable television network.
While confirming that talks on an access deal had occurred, it said last month that such talks were no longer in progress.
Analysts said speculation about an acquisition, which has kept online chat rooms busy this week, picked up steam after a television report referred to the rumors at noon Wednesday.
``The rumor out there in chat rooms -- and people talking about it -- is that AT&T will make a bid for AOL,'' a CNBC financial television reporter said on air, referring to only one of the rumors flying on Internet sites this week.
Other chat rooms have spread a different rumor -- that AOL was preparing to buy ExciteAtHome.
AT&T has consistently said it wants to be in the access business, but not the content business. It has stressed that it is committed to retaining its stake in AtHome, the high-speed Internet programming business, but has declined to comment on rumors it might entertain a deal to dispose of Excite, the Internet media network that is the other half of the business.