Lycos founder to fight merger
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March 9, 1999: 7:34 a.m. ET
Wetherell steps down from Lycos board to counter USA Networks merger
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LONDON (CNNfn) - David S. Wetherell, chief executive of CMGI, resigned his board position at Lycos Tuesday in order to oppose the Internet portal company's proposed merger with USA Networks.
The CMGI (CMGI) chief is aiming to use the company's 20 percent stake in Lycos (LCOS), the largest, single shareholding in the company, to try to find other possible suitors or keep the company independent.
Wetherell, one of Lycos' founders, in a statement called the USA-Lycos deal "inadequate" for Lycos shareholders.
Wetherell took the decision to spoil the bid, after failing to persuade USA Network's chairman Barry Diller to re-negotiate the original deal.
Lycos' shares have slumped 35 percent since the deal was announced in early February and Wetherell has refused to vote in favor of the merger in light of the depressed share price.
Wetherell said he hopes to explore other options for Lycos, including the keeping the company independent.
CMGI's chief may seek to enlist the support of other big shareholders to keep Lycos independent. Other investors have also been disappointed with the complicated deal, which offered Lycos shareholders no more than a 2 percent premium at the time of the offer. This is way below the usual high multiples paid for Internet companies.
Lycos shares closed at 83-7/8, down 2-3/16 on Nasdaq Monday. USA Networks (USAI)shares ended up 7/8 at 38-1/2.
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Lycos
USA Networks
CMGI
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