David Wetherell, the largest Lycos shareholder, announced today that he is resigning from the board in opposition to the sale.
"After further consideration, it is my opinion that the terms of the USA/Lycos transaction are inadequate for Lycos shareholders," Wetherell said in a statement. He added that he resigned from the board so that he could "explore the best options available to Lycos shareholders, including the possibility of Lycos remaining independent."
Media veteran Barry Diller's USA Network is in the process of acquiring Lycos in an $18 billion deal. Under the agreement, USA Network would own 61.5 percent, Lycos shareholders would own 30 percent, and Ticketmaster Online-CitySearch shareholders other than USA Network would own 8.5 percent. Diller would become chairman of the new company.
Just last week, Diller said his company would not renegotiate the terms of its acquisition of Internet portal Lycos. The portal's stock has fallen as investors have grown concerned that they were not receiving a premium on its sale price.
In addition, Lycos has been slapped by one shareholder lawsuit after another alleging that Lycos executives made misleading statements about the company's strategic future, including intentions to stay independent.
In a statement today, Lycos said it remains fully committed to the USA deal.
Wetherell is the chairman of CMGI, a investment fund whose interest are primarily in Internet companies, and which owns 18.5 percent of Lycos stock.
Shares of Lycos surged 17.14 percent or 14.38 points to 98.25 this morning, on hope that Wetherell's resignation from the board would allow him to propose different options for Lycos.