In for a penny, in for a pound -- or $25 million.
After funneling some $30 million in cash and services into iBEAM Broadcasting
Corp. and gaining a 49 percent stake in the company earlier this year,
broadband-network operator Williams Communications is bidding to buy the
struggling Sunnyvale, Calif.-based Webcasting outfit outright for $25 million in
cash.
But it isn't exactly a done deal. Simultaneously, iBEAM announced that it has
filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court in
Delaware, so any purchase bid will have to be approved by the court.
There is also the possibility that another bidder could come into the
process.
'iBEAM's impressive list of blue-chip streaming customers and expertise is a
perfect strategic fit for the assets we already have in place, including our
network and broadband-media platform,' Williams chairman and CEO Howard Janzen
said in a prepared statement.
Tulsa, Okla.-based Williams' purchase bid includes most of iBEAM's customer
contracts, facilities and equipment assets.
It also includes a loan of up to $18 million to keep the Webcasting business
up and running until the deal is closed. Pending the bankruptcy court's
approval, iBEAM will repay that loan using the sale proceeds, whether the deal
is struck with Williams or another bidder.
In April, iBEAM cut staff and started looking for financial options after
racking up a $43.7 million loss in the first quarter.
The company -- which has served some 1 billion streams in two years for the
likes of CNBC.com, AOL Time Warner Inc., NFL Films, GolfChannel.com and MTVi
Group -- faced 2001 with a dwindling bank account blamed in part on a drying
investment-capital market and cratering entertainment content. It tried to
switch focus to the potentially more lucrative business streaming business, but
that could not stem the flow of red ink.
'We remain committed to our founding vision that the Internet will develop
into a prime medium for audio and video communications,' iBEAM chairman,
president and CEO Peter Desnoes said in a prepared statement.
'Already, a large number of corporations use streaming on the Internet as a
means to effectively and efficiently communicate with distributors, suppliers
and employees,' he added. 'Further, the imminent evolution of both streaming and
download services promises to make the Internet the most important and exciting
entertainment medium since television.'
