agreed to pay $315.6 million to buy back its common and preferred stock held by the America Online unit of
Gateway said it will pay out $185.6 million in cash and $130 million in other compensation, defined as a reduction in cash payments for certain revenue-share payments that AOL would be required to make under the companies' strategic alliance.
Gateway will retire its Series A preferred stock, which was to convert into 22.2 million common shares at $8.99 apiece, and its Series C preferred stock, which has a stated value of $200 million and is redeemable at AOL's option next month.
Gateway got a $200 million five-year borrowing base revolving credit facility from an unnamed bank, and said it is considering other refinancing alternatives to increase its overall working capital. Gateway said the AOL isn't contingent on any financing, and the company believes it will have adequate working capital to meet its financial needs.
Early Tuesday, Gateway rose a dime to $5.90.