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RCN gets Allen's $1.65B
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October 4, 1999: 7:36 a.m. ET
Vulcan Ventures boosts stake to 27.4% in telecom services provider
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NEW YORK (CNNfn) - RCN Corp., a provider of broadband fiber optic-based communications services, said Monday that the high-tech venture capital firm of Microsoft co-founder Paul Allen has made an additional $1.65 billion investment in the company, raising its ownership interest to about 27.4 percent.
RCN said Allen's Vulcan Ventures will receive its stake in preferred stock convertible into RCN common stock at a price of $62 per share. The investment is in addition to a 4.5 percent stake in RCN that Vulcan already owned.
RCN (RCNC) shares closed Friday at 38-1/16, down 2-15/16.
Allen's other investments include pacts with such new media companies as Priceline.com (PCLN), Drugstore.com (DSCM), ZDTV, Oxygen Media, Go2Net (GNET), and Charter Communications.
"This is a great opportunity to immediately demonstrate synergy between RCN, Charter, and Go2Net," William Savoy, president, Vulcan Ventures, said in a statement. "As the Wired World continues to unfold, we look forward to finding opportunities between these companies and our other new media investments."
Two Vulcan nominees will be appointed to the RCN board. Vulcan and RCN have also agreed that Vulcan will not increase ownership in RCN.
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