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Terra-Lycos deal on track
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October 9, 2000: 2:04 p.m. ET
With CMGI's nod, Web portal says merger is set to close by month's end
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NEW YORK (CNNfn) - They're calling it a done deal.
Web portal Lycos Inc. (LCOS: Research, Estimates) on Monday said it expects to seal its merger deal with Spanish Internet service provider Terra Networks by the end of this month. Lycos said the deal now has the full support of CMGI Inc. (CMGI: Research, Estimates), the company's largest shareholder.
"Receiving CMGI's support is an important milestone that helps pave the way for the successful completion of the merger," said Bob Davis, Lycos' president and chief executive.
The two companies set their merger agreement last May under which Terra (TRRA: Research, Estimates) agreed to purchase all of Lycos' outstanding shares for $12.5 billion. Earlier this month, Terra completed a rights offering in which the company raised 2.2 billion euros, or $1.9 billion, based on conversion rates on September 22.
 A rights offering is an offering of common stock to existing shareholders who hold rights that entitle them to buy newly-issued shares at a discount to the price at which them will later be offered to the public.
Upon completion of the Terra merger with Lycos, Terra-Lycos is expected to have roughly $3 billion in cash, and Lycos shareholders will own between 41.6 percent and 49.9 percent of the new company.
The companies have received all regulatory approvals required to move forward with the merger. On September 22, the U.S. Securities and Exchange Commission declared the registration statement for the merger effective. Equivalent procedures are moving forward with securities regulators in Spain. Lycos and Terra have also received all antitrust clearances required prior to the merger.
The next procedural step before the deal is sealed will be a full Lycos' shareholder vote, expected to be held on Oct. 27.
Lycos shares were off $2.50, or 4.8 percent, at $50 in afternoon Nasdaq trade Monday. Terra's American depository receipts were down $1.62 at $26.12, a 5.9 percent decline. CMGI rose $1.31, or 6.3 percent, to $22.12. 
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