The lawsuits, along with a fourth filed ten days ago, seek class-action status. They allege that Lycos and its chief executive, Bob Davis, misrepresented to shareholders that the company intended to remain independent even though it was actively negotiating with USA Networks. The lawsuits claim that the statements, made just prior to a February 9 announcement that USA Networks would take control of Lycos, violate securities laws.
Lycos issued a statement saying: "We believe the lawsuits filed recently to be without merit and we intend to contest against the claims vigorously."
Shares of Lycos have dropped more than 30 percent since the proposed merger was announced. A day after the merger was announced, a shareholder filed suit in a Delaware court, and Milberg Weiss Bershad Hynes & Lerach, a large plaintiffs' firm that files dozens of shareholder lawsuits, filed suit on February 22. Over the past two days, three "copycat" lawsuits containing nearly identical claims also have been filed. All four suits have been filed in U.S. District Court in Boston.
Prior to the merger announcement, rumors swirled that a deal was in the works, pushing Lycos's stock price skyward. Less than two weeks before the merger was announced, Davis told a software group that executives remained "most committed to...the independence of Lycos."