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@Home in new cable deal
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October 2, 1997: 8:42 p.m. ET
Cable /Internet provider adds room for 5.5 million East Coast subscribers
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NEW YORK (CNNfn) - Cablevision Systems Corp. and @Home Corp. have agreed to form a strategic alliance to deliver high-speed Internet service to key East Coast markets including New York, Boston, and Cleveland, both companies said on Thursday.
Under terms of the agreement, Cablevision will receive a warrant to purchase about 11 million @Home series A common shares at 50 cents a share, the companies said in a joint statement.
If exercised, the warrant would give the Woodsbury, N.Y., cable company an 8.6 percent stake in @Home, valued at $240 million as of Thursday's closing stock price. @Home's stock closed down 1/4 at 22-3/8.
Both companies declined to state when the warrant could be exercised.
In return, @Home gets access to Cablevision's 5.5 million homes, which is conditional upon the completion of certain pending cable system acquisitions from TCI. Cablevision operates primarily in New York, New Jersey, Connecticut, Ohio and Massachusetts.
"By joining forces with Cablevision, Home Network gains access to a significant concentration of homes in key major metropolitan markets in the Northeast corridor," said Tom Jermoluk, chairman, president and chief executive of @Home.
The deal is similar to those struck with @Home's founding partners: Tele-Communications Inc., Comcast Corp. and Cox Communications Inc. It extends @Home's access to more than 50 million households in North America.
The transaction is pending certain approvals including board consent from both companies.
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@Home
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