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AOL buys MovieFone
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February 1, 1999: 6:16 p.m. ET
Online giant to boost content with $388M stock deal for ticket seller
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NEW YORK (CNNfn) - On a continued hunt for Internet-content properties, America Online Inc. said Monday it will buy the movie-ticketing and listing company MovieFone Inc. for $388 million in stock.
The merger, coming only hours after New York-based MovieFone (MOFN) said it had entered into discussions about a possible sale of the company, marks AOL's latest attempt to bulk up its plate of content offerings.
Shares of MovieFone were halted ahead of the announcement and closed up 1-1/2 to 26-1/2. America Online (AOL) dipped 4-9/16 to 171-3/16.
In a statement, Bob Pittman, president and chief operating officer of America Online, said: "MovieFone will add an exciting new area of local e-commerce to AOL and our other brands."
"By putting AOL's resources behind MovieFone, we will substantially enhance its already impressive performance and revenue potential," he added.
Terms of the deal, to be accounted for as a pooling of interests, call for the online giant to offer an as-yet unspecified fraction of an AOL share for each MovieFone share.
The exact fraction will be determined by dividing $29.25 by AOL's average stock price during a specific period prior to the merger's effective date, the companies said.
The rate will not be less than 0.1670 shares or more than 0.2259 shares -- valuing the buyout between $28.59 and $38.67 per share, based on Monday's close of AOL stock.
The Jarecki family -- including company chairman Henry Jarecki and his son, chief executive officer Andrew Jarecki -- controls about 92 percent of the votes and 73 percent of the equity of MovieFone. They have agreed to vote in favor of the acquisition by AOL, the companies said.
MovieFone, which is expected to be re-branded after the deal as AOL MovieFone, is one of the nation's largest movie-listing and ticketing services with deal with 17,000 screens in 42 cities nationwide.
Dulles, Va.-based America Online also nabs the online version MovieFone.com, seen as a complement to Digital City, AOL's local-listing service.
MovieFone's stock has been on a roll since December after the company said it expected a 30-percent gain in usage last year.
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