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H&R Block, Inc. Message Board

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  • tackspro tackspro Oct 19, 2012 11:31 PM Flag

    Compuserve was a bust

    "Year ago Block sold CompuServe to AOL for $1 billion."

    That is incorrect. Block sold Compuserve to WorldCom (in exchange for WorldCom stock), which in turn sold it to AOL. The history of Block's relationship with Compuserve is well documented on the internet and in SEC filings.

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    • ""In this three-way transaction, WorldCom first acquired all of CompuServe Corporation from H&R Block, Inc. WorldCom then exchanged CompuServe's worldwide online services and $175 million in cash for AOL's network services subsidiary ANS Communications, Inc. ""

      Block then sold it's shares of Worldcom stock to Goldman Sachs and did a $15 million buyback on it's own stock (returning some of the proceeds to shareholders)

      ""H & R Block Inc. said today that it had sold its 30.1 million shares of Worldcom Inc. to Goldman, Sachs & Company for $34.375 a share, or $1.03 billion.

      H & R Block got the shares after selling its stake of the Compuserve Corporation to Worldcom. Worldcom paid $1.3 billion in stock for Compuserve in a move to offer a range of Internet services to corporations.

      H & R Block, the tax and financial services company based here, sold its 80 percent stake in Compuserve to focus on building its tax preparation and financial services business.

      ''We just wanted to go our separate ways,'' said H & R Block's treasurer, Brian Schell.

      H & R Block sold the shares at a discount to their closing price today of $35.25. H & R Block's shares fell 87.5 cents, to $43.

      The company also said today that it planned to buy back up to 15 million of its common shares, or about 14 percent of its outstanding stock. The company currently has about 105 million common shares outstanding.""

      Block bought Compuserve for $23 million and sold it for $1 billion (with a B).

      ""H&R Block, primarily a tax-return preparation company, bought CompuServe for $23 million, and it quickly became Block's fastest-growing unit. Computer services contributed $68 million to Block's sales — an estimated 15% of revenues — and almost $8 million in operating profits in the year ended April 30, 1989.""

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