SEATTLE –AOL Time Warner would be allowed to propose a takeover bid for Amazon.com–as long as it did so quietly –under the terms of a $100 million investment AOL made in Amazon Monday.
According to records filed with the Securities and Exchange Commission, and reported by Dow Jones Newswires, AOL could propose a buyout, but not publicly and not without the approval of Amazon.com.
Amazon.com spokeswoman Patty Smith would not comment beyond to say that the company entered into a “modest and appropriate standstill agreement” with AOL. A standstill agreement typically restrains companies from buying shares in other companies for a specified period of time.
According to the filing, AOL and its affiliates also agreed to hold onto its stake in Amazon _ which accounts for about 2 percent of the company –for at least two years.
The company also said it wouldn’t acquire more than 5 percent of the company, or seek to negotiate a merger or acquisition, without a prior agreement between the two.
That agreement would also end if another company made an unsolicited bid for Amazon, or if Amazon publicly sought bids for a takeover.
Amazon and AOL announced the $100 million investment, for at least 6,543,646 shares of common stock, as the two companies announced a strategic alliance Monday.
Under the multiyear agreement, AOL will use Amazon’s electronic commerce technology to create a Web store for AOL’s 30 million customers, and will receive an unspecified payment for the efforts. The store is expected to launch in time for the 2002 holiday season.
Copyright 2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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