Type: 425
Sequence: 1
Description: Rule 425 Communications
Filed by Lycos, Inc.
Pursuant to Rule 425
under the Securities Act of 1933
Commission File Number 0-27830 Subject
Company: Terra Networks, S.A.
This announcement 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
contained herein address future financial and operating results and the
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 our businesses will not be
integrated successfully; costs related to the merger; increased competition
and its effects on pricing, spending, third-party relationships and revenues;
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; inability to
establish and maintain relationships with commerce, advertising, marketing,
technology and content providers; and failure to obtain necessary stockholder
approvals for the merger. For a detailed discussion of these and other
cautionary statements, please refer to Lycos' and Terra's filings with the
Securities and Exchange Commission.
Investors and security holders are urged to read the proxy
statement/prospectus regarding the merger when it is finalized and becomes
available, because it will contain important information. Lycos and Terra will
file the proxy statement/prospectus with the Securities and Exchange
Commission. Investors and security holders may obtain a free copy of the final
proxy statement/prospectus (when it is available) 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.
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TELEFONICA, TERRA, LYCOS AND BERTELSMANN REAFFIRM
COMMITMENT TO TERRA LYCOS MERGER
WALTHAM, Mass., July 26, 2000 -- Terra Networks, S.A. (MC: TRR; NASDAQ: TRRA),
Lycos, Inc. (NASDAQ: LCOS), Telefonica S.A. and Bertelsmann today reaffirmed
their strong commitment to the Terra Lycos merger.
Bob Davis, president and CEO of Lycos, said, "Our merger with Terra is on
track to create a global powerhouse. All four companies remain strongly
committed to completing this groundbreaking transaction because it is
financially and strategically compelling for our shareholders. Telefonica
considers Terra's acquisition of Lycos to be the cornerstone of its Internet
strategy to be a global leader, and continues to reaffirm their commitment to
the merger."
Davis added, "Terra shareholders have approved the merger. We also expect the
rights offering that Telefonica is committed to underwrite to be accelerated
to early September, and we expect the merger to be completed in October."
"Bertelsmann is pleased to be the preferred content provider of the Terra
Lycos alliance," Thomas Middelhoff, chairman and chief executive officer of
Bertelsmann stated. "Terra and Lycos combined will be a powerful force in the
global markets."
On June 28, 2000 Terra filed a Registration Statement with the Securities and
Exchange Commission related to the combination of Terra and Lycos. The
Registration Statement is subject to SEC review and after being finalized and
becoming effective will include the definitive proxy statement/prospectus that
will be used to solicit stockholder approval of the proposed acquisition by
the stockholders of Lycos. The shareholders of Terra approved the acquisition
on June 8, 2000.
About Terra Networks
Terra Networks is one of the leading providers of Internet access (ISP) and
local-language interactive content and services to residential and small
office/home office users in the Spanish- and Portuguese-speaking world. Its
ISP business has more than 2 million customers. Its portals serve more than
700 million page-views and at the close of the most recent quarter had 63
million visits per month. Terra currently is the leader in Internet activities
in Spanish- and Portuguese-speaking countries, including Spain, Argentina,
Brazil, Mexico, Chile, Peru, Venezuela, Guatemala and the United States. Terra
plans to launch new portals and Internet access services in its target
markets.
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
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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.
About Telefonica
Telefonica, S.A. is the largest supplier of telecommunications services in the
Spanish- and Portuguese-speaking world. Through affiliate companies in Latin
America, Europe, North Africa and the United States, the Telefonica Group
services a potential market of more that 550 million customers in 17
countries. With 23 billion euros in 1999 revenues, Telefonica is also Spain's
largest company in terms of profits, assets, market capitalization and
employment. As of March, 2000, the companies in the Telefonica Group had a
total of 62.4 million customers in Spain and abroad. The group manages 39.5
million fixed telephone lines, 21.8 million cellular clients (making it one of
the world's top five mobile telephony providers), and 1.1 million KTV
customers.
About Bertelsmann
Bertelsmann is the third-largest media company in the world, with consolidated
revenues of approximately $16.4 billion. The company has significant interests
in all areas of media, including books (Random House); magazine and newspaper
publishing (Gruner + Jahr); music (BMG Entertainment); television (in Europe,
CLT-UFA); multimedia (Lycos Europe and barnesandnoble.com, a joint venture
with Barnes & Noble, Inc.); film; and radio. With more than 600 individual
companies, Bertelsmann currently employs nearly 72,000 people in 54 countries.
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 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 Condition" 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.
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Investors and security holders are urged to read the joint proxy
statement/prospectus regarding the business combination transaction referenced
in the foregoing information, when it becomes available, because it will
contain important information. The joint proxy statement/prospectus will be
filed with the Securities and Exchange Commission by Terra and Lycos.
Investors and security holders may obtain a free copy of the joint proxy
statement/prospectus (when it is available) and other documents filed by Terra
and Lycos with the Commission at the Commission's website at www.sec.gov. The
joint proxy statement/prospectus and these other documents may also be
obtained for free from Terra or Lycos.
# # #
Contacts:
Michele Perry Billee Howard
Lycos, Inc. Shandwick International
781-370-2678 646-658-8119
mperry@lycos.com bhoward@shandwick.com