Exodus looks for way out
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August 23, 2001: 3:41 p.m. ET
Web hosting firm looking at options, including sale, after 3 quit board
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NEW YORK (CNNfn) - Exodus Communications Inc. confirmed Thursday that the troubled Web hosting firm is looking at all its options, which could include a sale.
Exodus, which handles the Web operations for companies such as Yahoo! Inc. (YHOO: down $0.10 to $13.30, Research, Estimates) and eBay Inc. (EBAY: down $1.60 to $55.31, Research, Estimates), will evaluate any offers it receives, company spokeswoman Maureen O'Connell told CNNfn.
A sale of the company is one of its possible options as well as selling or leasing back its office space or facilities, she said.
"We are looking at all our options," O'Connell said.
At the end of second quarter, Santa Clara, Calif.-based Exodus hired a financial advisor to explore funding alternatives for the company, O'Connell said.
Cash strapped Exodus, with a more than $3 billion in debt, is open to takeover offers, CEO Ellen Hancock told USA Today Thursday.
Earlier this week, three members of Exodus's board resigned, leaving seven remaining. Exodus did not give any reason but maintained that the departures were amicable.
Directors Thadeus Mocarksi, Mark Dubovoy, and Naomi Seligman left the Exodus board after losing an intense debate about the future of the firm, the newspaper reported, citing people close to the situation.
Mocarski, managing director of investment firm Navis Partners LLC, maintained Thursday that he resigned his board spot because his venture fund had long since liquidated its Exodus holdings. Mocarski, who would not comment on a sale, said he was not aware of any rift between CEO Hancock and the board.
However, he did concede that several investment advisers had offered different opinions of company alternatives.
Shares of Exodus (EXDS: down $0.01 to $1.20, Research, Estimates), which once traded as high as $69, have dropped 98 percent and are now in the $1 range. Exodus, which started the year with 4,400 employees, cut staff in June by 18 percent to 3,800 people and plans to reduce remaining workers to fewer than 3,000, according to a 10-Q Securities and Exchange Commission filing on Aug. 14.
Exodus has $3.5 billion in debt, the SEC filing said. The company has about $600 million in cash, which is enough to last it through the end of the year, USA Today said.
British telecommunications company Cable & Wireless reportedly had been interested in buying Exodus but instead bought Digital Island in May.
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Exodus Communications
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