IBM, SEARS WILL SELL PRODIGY TO NEW TEAM.

Byline: The New York Times

IBM and Sears, Roebuck finally ended their costly foray into the computer on-line business Sunday when they agreed to sell Prodigy Services Co. to about 40 Prodigy managers and an American start-up company backed by a Mexican billionaire.

A management buyout of Prodigy had been expected for weeks. It was reported in early April that Prodigy's new management team wanted to buy the service. IBM and Sears began last fall to try to find a major corporate buyer interested in the struggling on-line service but failed.

In recent weeks, Prodigy management, helped by investment bankers Wasserstein Perella Securities Inc., had been scrambling to find a financial backer for its buyout plan.

The investor willing to back Prodigy's revival plan is International Wireless Inc., a company in Cambridge, Mass., founded two years ago. One of its co-chairmen, Greg Carr, 36, is also chairman of Boston Technology Inc., a supplier of services like voice mail to phone companies.

A major investor in International Wireless is Grupo Carso, a Mexican conglomerate whose holdings include a stake in Telmex, the phone company. Grupo Carso is owned by Carlos Slim Helu, one of Mexico's richest men. Last year, Forbes magazine estimated the net worth of Slim and his family at $3.7 billion.

The terms of the sale were not disclosed. But a person familiar with the deal said the value was nearly $200 million, including the value of real estate leases on buildings Prodigy occupies and its communications network.

The price is a fraction of the estimated $1.2 billion that IBM and Sears, Roebuck & Co. had invested in Prodigy over more than a decade. Yet both companies were apparently willing to sell for so little because their corporate priorities had shifted and neither wanted to keep backing Prodigy in what analysts say is a risky turnaround effort.