(COMTEX) Terra Lycos Exchange Ratio Fixed At 2.15 With October Closing; Values Lycos
Shares At $65 as of October 16, 2000
WALTHAM, Mass., Oct 17, 2000 (BUSINESS WIRE) -- Lycos, Inc. (NASDAQ: LCOS), the
Internet's leading multi-brand network, today announced that the exchange ratio
for its upcoming merger with Terra Networks (NASDAQ: TRRA) has been set at 2.15
with the expected closing this month. Lycos shareholders will receive 2.15 Terra
shares for every Lycos share currently owned, upon the closing of the merger
later this month. Shareholders will have the option of choosing either a Terra
ordinary share or a Terra ADS (American Depository Share). The implied value of
a Lycos share, based on the October 16, 2000 Terra ordinary share closing price
in Madrid, would be $65.
"The exchange ratio offers Lycos shareholders a substantial premium," said Bob
Davis, president and CEO of Lycos, Inc. "But of equal importance, is the global
powerhouse we are creating with Terra Lycos. We have a history of success in
creating shareholder value at Lycos and we expect our new company to continue
that tradition."
The merger of Terra and Lycos is expected to be complete this month, creating
Terra Lycos with operations in 40 countries around the world and approximately
$3 billion in cash. The new company will be one of the most well capitalized
Internet companies in the world and will build on its core themes of
globalization, convergence and profitability.
Yesterday, Telefonica, Terra's main shareholder, reaffirmed its commitment to
the merger, which they said, "will create one of the leading Internet companies
in the world." Telefonica added that the new company will be its principal
channel for developing Internet business. In September, Terra Networks raised
$1.9 billion in a rights offering, nearly all of which was from Telefonica.
Telefonica also said, "The merger with Lycos will create a company positioned to
play the convergence of telecommunications, media and Internet, because of its
strong partnerships with Bertelsmann, Sumitomo, Singapore Telecom and Bell
Canada, among others, the scope of its multinational sales force and its broad
international footprint." They added, "Terra's joint-venture with Telefonica
Moviles, Terra-Mobile, will also play a key role in the strategic area of
wireless Internet."
The final step prior to the closing of the Terra Lycos merger is the Special
Meeting for Lycos stockholders, which will be held on October 27, 2000, at which
Lycos shareholders have the opportunity to vote on the proposed merger. The
proxy statement was mailed to Lycos shareholders on September 28. Lycos recently
announced that its largest shareholder, CMGI, Inc., voted all of its shares in
favor of the merger.
Lycos and Terra have received all regulatory approvals required to date to move
forward with the merger. On September 22, the Securities and Exchange Commission
declared the registration statement for the merger effective. Equivalent
procedures are moving forward with the CNMV in Spain. Lycos and Terra have also
received all anti-trust clearances required prior to the merger.
About Lycos, Inc.
Founded in 1995, Lycos, Inc. is a leading Web media company and owner of the
Lycos Network, one of the most visited hubs on the Internet reaching nearly one
out of every two U.S. Web users. The Lycos Network is a unified set of Web
sites, attracting a diverse audience by offering a variety of services,
including leading Web search and navigation resources; Web community and
communications services including free homepage building, free Web-based e-mail,
clubs, chat, instant messaging; a personalized My Lycos start page; a
comprehensive shopping center featuring more than 3,100 merchants; and an
assortment of compelling content such as games, music, news, fun and educational
information and activities for kids as well as information about investing,
technology, entertainment, sports, small business, travel and more. The Lycos
Network is composed of Lycos.com, Tripod, WhoWhere, Angelfire, MailCity, HotBot,
HotWired, Wired News, Webmonkey, Sonique, Quote, Gamesville, Lycos Zone and
Matchmaker. Headquartered near Boston in Waltham, Mass., Lycos, Inc. is a global
Internet leader with a major presence throughout the U.S., Europe, Asia, Canada
and Latin America.
On May 16, Lycos, Inc. entered into a definitive agreement with Terra Networks,
S.A. (MC: TRR; NASDAQ: TRRA), a global Internet company and the leading provider
of Internet access and interactive content and services to the Spanish- and
Portuguese-speaking world, under which Terra will acquire Lycos in a
stock-for-stock transaction. Upon completion of the transaction, Lycos
shareholders will own approximately 41.6% to 49.9% of the new company, Terra
Lycos. The formation of Terra Lycos is subject to shareholder and regulatory
approval.
Forward Looking Statements
This release contains forward-looking statements within the meaning of the "Safe
Harbor" provisions of the Private Securities Litigation Reform Act of 1995.
These statements are based on management's current expectations or beliefs and
are subject to a number of factors and uncertainties that could cause actual
results to differ materially from those described in the forward-looking
statements. The forward-looking statements in this release address the following
subjects: expected date of closing the merger; future financial and operating
results; and timing and benefits of the merger.
The following factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements: the risk that
Terra's and Lycos's businesses will not be integrated successfully; costs
related to the merger; failure of the Terra or Lycos stockholders to approve the
merger; inability to obtain, or meet conditions imposed for, antitrust approvals
related to the merger; inability to further identify, develop and achieve
commercial success for new products, services and technologies; increased
competition and its effects on pricing, spending, third-party relationships and
revenues; inability to establish and maintain relationships with commerce,
advertising, marketing, technology and content providers.
For a detailed discussion on these and other cautionary statements, please refer
to the proxy statement/prospectus which Terra and Lycos have filed with the
Securities and Exchange Commission, and to Terra's filings with the Securities
and Exchange Commission, including the Risk Factors section of Terra's F-1
filing that became effective in November 1999, and Lycos's filings with the
Securities and Exchange Commission, including the section titled "Factors
Affecting the Company's Business, Operating Results and Financial Conditions" of
the Management's Discussion and Analysis in its Form 10-K for the year ended
July 31, 1999 and the Risk Factors section of Lycos's S-3 filing that became
effective in March, 2000.
The proxy statement/prospectus was mailed to Lycos stockholders in order to seek
their approval of the merger on or about September 28, 2000. We urge investors
to read the proxy statement/prospectus and any other relevant documents that
Terra Networks and Lycos have filed and will file with the SEC because they
contain important information.
Investors and securityholders may obtain a free copy of the proxy
statement/prospectus and other documents filed by Lycos and Terra with the SEC
at the SEC's web site at www.sec.gov. The proxy statement/prospectus and these
other documents may also be obtained for free from Lycos or Terra. Please read
the proxy statement/prospectus carefully before making a decision regarding the
share exchange.
(c)2000 Lycos, Inc. - Lycos(R)is a registered trademark of Carnegie Mellon
University. All other product or service marks mentioned herein are those of
Lycos or their respective owners. All rights reserved.
CONTACT: Lycos, Inc.
Michele Perry
781-370-2678
mperry@lycos-inc.com
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KEYWORD: MASSACHUSETTS
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS
INTERNET
E-COMMERCE
HARDWARE
SOFTWARE
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