David Wetherell, the chief executive of Internet venture capital company CMGI, has resigned from the board of Lycos Inc in protest over the acquisition of the portal company by USA Networks Inc. The merger would combine Lycos’ internet business with USA Networks’ local content, auctions and direct commerce holdings. Whether the $17-$18 billion deal will go ahead depends on shareholder approval. What makes Wetherall’s actions remarkable is that his company CMGI is the largest shareholder in Lycos.
In the statement announcing his resignation, Wetherall said that the deal as it stands is inadequate for Lycos shareholders. Lycos is worth a good deal more than its value today, he told Reuters. I do believe that the present economics just don’t work. In spite of Wetherall, Lycos says it remains: fully committed to the USA/Lycos Interactive Networks transaction. But Wetherall’s is not the only dissenting voice. The acquisition is the subject of at least four separate shareholder class action suits accusing Lycos executives of misleading investors.
