CMGI talks with Lycos stalled -- WSJ
NEW YORK, June 24 (Reuters) - CMGI Inc has held talks with Lycos Inc. (Nasdaq:LCOS - news) about a possible acquisition of the Web portal, but discussions have recently stalled amid ill feelings between the chief executive officers of the two companies, the Wall Street Journal reported.
CMGI is currently in talks to buy AltaVista from Compaq Computer (NYSE:CPQ - news) along with other assets for $2 billion to $3 billion in stock, according to the paper.
Citing people familiar with matter, the Journal said that though it couldn't be determined how far the merger talks proceeded, the companies foundered partly on the unwillingness of Lycos's CEO, Robert Davis, to work for his CMGI counterpart, David Wetherell.
Relations between the two men previously broke down in February after Wetherell, then a Lycos board member, retracted his support for a merger between Lycos, USA Networks (Nasdaq:USAI - news) and Ticketmaster Online-Citysearch (Nasdaq:TMCS - news) and quit the Lycos board to fight it, the paper said.
People familiar with Lycos's thinking said the company hasn't completely foreclosed a sale to CMGI. But Lycos has been pressing for a deal that would value its shares above $127, the price at which they were trading before the USA Networks deal was announced, said one person familiar with the matter, according to the Journal
That would value Lycos at about $6 billion. Lycos shares closed Wednesday at $93-1/2, up $4.4375 in Nasdaq Stock Market trading. CMGI shares rose $4 to $98.9375 on Nasdaq.
A common strand between the CMGI interest in Lycos and the Compaq assets, said people close to the matter, is CMGI's need to bolster its operating assets to avoid possibly onerous regulation as an investment company, or mutual fund, under federal securities laws.
Compaq's board is expected to vote on the CMGI acquisition proposal Thursday, according to a Compaq insider, the paper reported.
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