Executives at Spanish Internet service provider Terra Networks, which bought Lycos today in an all-stock deal valued at $12.5 billion, inked the first international acquisition of a U.S. portal in a decidedly conspicuous locale: the Four Seasons Hotel in New York. Preparatory meetings during the past week took place in conference rooms of Manhattan law firms.
According to an attorney who helped finalize the acquisition, the deal came together with a distinct lack of secrecy or exotics--characteristics that typically enshroud multibillion-dollar, multinational acquisitions. Such agreements often involve a hive of executives gathered clandestinely in far-flung hideaways, spending months on the lam from the media and securities regulators.
"We were looking to get the deal done expeditiously," said Cliff Neimeth, senior shareholder for New York-based Greenberg Traurig, lead U.S. counsel for Terra Networks' parent company, Telefonica. "It went very, very smoothly...There's nothing juicy."
Neimeth said executives at the Madrid-based Internet service provider and the Waltham, Mass.-based Internet portal never feared their intentions would become public because the deal came together relatively quickly.
About two dozen executives began formal discussions several weeks ago, and regulatory details were ironed out in the final 12 hours before the companies announced their plan today.
The volatile stock market didn't dissuade them from forging ahead; Terra executives simply agreed to pay a certain price for Lycos even if the stock were to plummet. The only sticking points in the last hours before the deal was finalized had to do with niggling discrepancies between securities laws governing public companies in Spain and in the United States, Neimeth said.
Perhaps the biggest annoyance was the six-hour time difference between Madrid and Boston, which made lengthy conversations inconvenient in the early days of discussions. About 50 people from both companies and their law firms attended round-the-clock meetings from Friday until this morning, Neimeth said.
Language was not a problem for the executives and attorneys who inked the deal. Several lawyers and Terra executives fluent in English acted as translators, and the meetings were conducted in a mix of Spanish and English. The official language for the new company, which will be based at Lycos' headquarters near Boston, has not yet been chosen, Neimeth said.
And what about cross-cultural clashes between the stereotypically tempestuous Spaniards and free-wheeling Americans?
Neimeth said no controversy marred the speedy proceedings. Instead of serving Spanish paella or Boston clam chowder or some other ethnic delicacy, executives feasted on relatively neutral deli sandwiches and M&Ms.
"There was nothing in the way of a cultural dynamic," Neimeth said from a phone at the Four Seasons Hotel about a half-hour after the deal was finalized. "I think both companies are very similar in their management style. They're both aggressive, large companies, which is what makes it a positive combination."