After months of speculation and anticipation, it looks like Starnet Communications has finally found a buyer for its adult entertainment division. The company announced Monday the signing of a letter of intent with an unnamed purchaser.
CEO Meldon Ellis called the deal a "tremendous strategic and symbolic step forward for Starnet that will both strengthen us financially and enhance our brand."
Ellis continued, "Sale of this unit establishes a clear focus and direction for Starnet, which is critical to building a premium brand. The move marks one of the final steps in the transformation of Starnet into a leading provider of cutting-edge, Web-based gaming products and services.
"Strategically, the agreement is a milestone, enabling us to focus all our financial and human resources on I-gaming and related markets where returns on investment are highest. We have spent the past eighteen months developing our I-gaming business model and continue to be impressed by the results it has generated; results that far surpass what our previous operations could ever have achieved. Going
forward, we will continue to refine this model and target related markets to maximize the value inherent in our business approach, support the Starnet brand and deliver increased shareholder value."
Ellis says the two companies are negotiating the finer points of a definitive agreement. A formal announcement is expected to come in seven to 10 days.
Starnet informed investors several months ago that intended to sell its adult entertainment assets, which include its flagship sites, www.sizzle.com and www.chisel.com, as well as nine other revenue generating sites and approximately 50 additional promotional sites. The company began taking auction bids for the sale of its adult entertainment division in August 1999.