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Allen pledges to Allegiance
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August 4, 1999: 1:17 p.m. ET
Billionaire investor takes $75M stake in Dallas-based telecommunications firm
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NEW YORK (CNNfn) - Billionaire investor Paul Allen agreed Wednesday to take a $75 million stake in Dallas-based telephone carrier Allegiance Telecom Inc., as the Microsoft Corp. co-founder continues to spread his wealth to fledgling high-tech companies.
Allen, through his Vulcan Ventures investment organization, will purchase 1.5 million Allegiance (ALGX) shares at $50 per share, with the option to buy an additional 5 million shares at $56 a share by Nov. 1.
Allegiance shares closed at 46-3/8 Tuesday on the Nasdaq stock exchange.
Allegiance provides local, long-distance and high-speed data and Internet services in 16 U.S. markets. The company plans to expand its offerings to 24 major metropolitan areas by mid-2000.
Though Allen's investment, Allegiance and Vulcan plan to explore ways to enhance Allegiance's Internet and e-commerce applications.
"Our agreement with Vulcan Ventures may accelerate our rollout of Internet content and e-commerce services to existing and future customers," said Royce Holland, Allegiance chairman and chief executive officer. "This relationship should help make Allegiance a leader in commercializing Internet applications in the medium and small business market."
Through Vulcan Ventures, Allen has invested in more than 100 companies.
Allegiance shares rose 13/16 to 47-3/16 in midday trade Wednesday.
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