Lycos Inc says it is close to filing its proxy statement with the Securities and Exchange Commission on the controversial proposed merger with USA Networks Inc and that the deal won’t contain any changes in the originally-announced terms. The company’s vice president of finance Thomas Guilfoile told press and analysts at the PaineWebber internet conference in New York that the proxy should be filed within a week and that the company doesn’t expect any amendments from the terms which have caused Lycos shareholders – most notably 18.5% holder CMGI, which had publicly denigrated the deal and enlisted investment bank Morgan Stanley Dean Witter to find a better one – so much concern.
Under the complicated terms of the merger, USA Networks would control 61.5% of the new company, while Lycos shareholders would get 30% and USA Networks subsidiary Ticketmaster Online/CitySearch Inc would own 8.5%. Guilfoile said that the proposed deal hasn’t been well understood by investors and that the company is doing all it can to change that. Although pressed by reporters he wouldn’t comment further, pending the filing of the proxy.
The news came just a day after CMGI managing director Peter Mills said at the same PaineWebber gathering that other parties have shown a keen interest in Lycos. It is now expected that those would-be suitors will stay on hold until after Lycos shareholders vote on the deal, however, for fear of pushing the possible price for the company higher. A move before the shareholder vote could trigger a termination agreement built into the proposed deal under which USA Networks would be allowed to buy a 17.5% stake in Lycos at about $127 per share. Lycos closed Tuesday at $105.50, down $0.25.
