Jun, 2001 : Digex Completes Complicated WorldCom Pricing Process
📅 - Digex came another step closer to settling its business with WorldCom this week when the managed Web and application hosting provider announced on Friday that it had completed the complicated process of determining an average trading price to be used as a value for WorldCom stock in the issue of a settlement fund.
The settlement fund was part of a plan agreed upon earlier in the year between the two companies, intended to resolve a legal dispute launched by Digex on behalf of its shareholders regarding WorldCom's acquisition of a controlling stake in Digex through its merger with Intermedia Communications Inc.
The value of the WorldCom Group and the MCI Group common stock, for the purposes of the settlement fund, was based on the average trading price taken from 10 trading days selected randomly from the 20-day trading period beginning on May 31, 2001 and ending on June 27, 2001. The average trading price generated by this method was $16.672 per share.
According to Digex, if the merger closes as it is currently scheduled to, WorldCom will deposit 9,896,833 shares of WorldCom Group common stock and 395,873 shares of MCI Group common stock into a settlement fund on July 2, 2001.
Of the WorldCom Group and MCI Group shares deposited into the fund, approximately 7.5 percent will be distributed to the plaintiff's legal counsel in the shareholder litigation, about 46.25 percent will be distributed to Digex shareholders who held shares in Digex Class A common stock as of the close of business on September 1, 2000 and about 46.25 percent among the shareholders of Digex Class A common stock as of the close of business on June 29, 2001.
The settlement fund is one of a collection of steps agreed to by the companies in the interest of resolving the matter. Included among those are agreements that will see WorldCom offer Digex's managed hosting services through a sales channel plan, provide funding for the performance of Digex's 2001 and 2002 business plan and allow Digex to offer its advanced hosting services through WorldCom's Internet data centers around the globe.
In a statement released earlier this year, WorldCom said that the acquisition of Intermedia's controlling interest in Digex would represent a major step toward the execution of WorldCom's planned Web hosting expansion.
The settlement fund was part of a plan agreed upon earlier in the year between the two companies, intended to resolve a legal dispute launched by Digex on behalf of its shareholders regarding WorldCom's acquisition of a controlling stake in Digex through its merger with Intermedia Communications Inc.
The value of the WorldCom Group and the MCI Group common stock, for the purposes of the settlement fund, was based on the average trading price taken from 10 trading days selected randomly from the 20-day trading period beginning on May 31, 2001 and ending on June 27, 2001. The average trading price generated by this method was $16.672 per share.
According to Digex, if the merger closes as it is currently scheduled to, WorldCom will deposit 9,896,833 shares of WorldCom Group common stock and 395,873 shares of MCI Group common stock into a settlement fund on July 2, 2001.
Of the WorldCom Group and MCI Group shares deposited into the fund, approximately 7.5 percent will be distributed to the plaintiff's legal counsel in the shareholder litigation, about 46.25 percent will be distributed to Digex shareholders who held shares in Digex Class A common stock as of the close of business on September 1, 2000 and about 46.25 percent among the shareholders of Digex Class A common stock as of the close of business on June 29, 2001.
The settlement fund is one of a collection of steps agreed to by the companies in the interest of resolving the matter. Included among those are agreements that will see WorldCom offer Digex's managed hosting services through a sales channel plan, provide funding for the performance of Digex's 2001 and 2002 business plan and allow Digex to offer its advanced hosting services through WorldCom's Internet data centers around the globe.
In a statement released earlier this year, WorldCom said that the acquisition of Intermedia's controlling interest in Digex would represent a major step toward the execution of WorldCom's planned Web hosting expansion.
Reads: 1717 | Category: General | Source: TheWHIR : Web Host Industry Reviews
URL source: http://www.thewhir.com/marketwatch/digex629.cfm
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