At Home Gets Excite-ment

At Home Network will acquire search portal Excite for $6.7 billion, giving the provider of high-speed cable Internet connections access to millions of prospective customers.

Under the agreement announced Tuesday, At Home Network (ATHM) said it will exchange 1.04 of it shares for each share of Excite (XCIT). That would value Excite at slightly more than $106 a share, or a 57 percent premium, based on Friday's closing prices.

Shares of Excite soared 42 1/2 to close at 110. At Home climbed 13 3/8 to 115 3/8.

The deal, expected to close in about three months, has been approved by both boards of directors, the companies said. It's the largest-valued deal in the Internet business so far, surpassing America Online's (AOL) proposed $4 billion-plus takeover of Netscape Communications (NSCP).

At Home, a small but rapidly growing provider of high-speed Internet access via cable TV, is hoping to use Excite as a springboard to the 60 million registered users of the No. 2 search engine.

It aims to lure customers with access speeds dozens of times faster than the more common phone dialup service. The lack of high-speed access is commonly cited as the biggest drag on the Internet's growth.

"We are merging with Excite not only for what they have achieved, but what we become together - the new media network for the 21st century," Tom Jermoluk, chief executive of At Home, said in a statement.

"Excite and At Home will give consumers access to the information they want, when they want it, whether they are using a PC, TV, or any other communications device."

For Excite, it gives the search portal access to At Home's high-speed network and closer ties with telecom giant AT&T (T) in its effort to unseat industry leader Yahoo! (YHOO).

Ma Bell will become a major shareholder of At Home once the phone company's acquisition of Tele-Communications Inc. (TCOMA) is completed. TCI, the second largest U.S. cable operator, is the biggest shareholder in At Home.

Shares of AT&T put on 7 3/4 to 92.

AT&T, for its part, is spreading its tentacles far behind its once-traditional domain of long-distance service. It's goal: to offer "one-stop" shopping - Internet, cable, data, local and long-distance - for all its customers' needs.

The agreement does provides At Home with an option to acquire a 19.9 percent interest in Excite, which becomes exercisable "under certain customary circumstances."

Excite will become a separate subsidiary of At Home.

Written by By Steve Gelsi and Jeffry Bartash