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CompuServe, AOL deal?
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April 2, 1997: 6:29 a.m. ET
Investment research firm reports Internet providers in merger talks
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NEW YORK (CNNfn) -- The stock of online service provider CompuServe Inc. leapt on Tuesday after a report by Wall Street Strategies of a rumor that it was to be acquired by America Online Inc.
Shares of CompuServe (CSRV) gained 1-5/32 on the Nasdaq Tuesday to 11 while America Online (AOL) also saw gains, rising 3-1/4 to 45-3/4 on the New York Stock Exchange.
Investment research firm Wall Street Strategies said AOL was making a strong play for CompuServe, which is 80 percent owned by H&R Block Inc.
A spokesman for H&R Block told the Wall Street Journal that it was just "rumor and speculation." An AOL spokesman also called it a "market rumor" while CompuServe declined to comment.
The Dulles, Va.-based AOL would boost its current eight million customer base by 25 percent with the addition of CompuServe, which has 2.9 million users.
Charles Payne, president and chief analyst at Wall Street Strategies told Reuters, "We think that when the smoke clears, you will have Microsoft and AOL as the only two providers of online services."
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