Telefonica Complains Lycos Europe Sell-Off Too Slow
This story was written by Robert Andrews.
Telefonica's (NYSE: TEF) LE Holding Corporation, the subsidiary through which it owns 32 percent of Lycos Europe, has filed an application for an inquiry in to the "policy and conduct of business" at the once-mighty portal. The complaint was made at the Amsterdam Court of Appeal's enterprise chamber in Lycos Europe's native Holland. paidContent:UK understands the application complains that Lycos Europe management has not examined fully enough all options for sale of the company.
Lycos Europe, a JV with Bertelsmann, put itself up for sale in a strategic review back in April. But, though CEO and Bertelsmann family heir Christoph Mohn suggested AOL (NYSE: TWX) and German ad net Tomorrow Focus were bidding around 200 million, it's clear the sale process is dragging; last week Lycos Europe told me: "For the moment, there are no updates to be made." Reporting further losses this week, it said it expects to sell in the second half of this year. Dresdner Kleinwort is conducting the search.
Lycos Europe said it would review Telefonica's request. The situation is sticky as it pits the joint majority shareholder against the CEO, who himself owns 12 percent according to Telefonica.
Lycos Europe has always been a separate company to America's Lycos Inc but both sites have suffered since they were the web's most-visited back in the portal days of 1999. The US company has changed hands twice since then and the European venture has failed to capitalise on the online ads boom - though it still trumpets recent product releases like Yahoo (NSDQ: YHOO) Answers clone Lycos iQ, it's been losing money at a particularly chronic rate in the last two years. Emblematic of the state of affairs, Lycos Europe last year paid Lycos Inc $5.2 million to renew its license to use the brand, while entering the US itself under a completely different name, Jubii.
We received speculation that one bid would be put in from a suitor teaming up with Lycos Inc's Korean owner Daum, in a move that would reunite the two sites - but both Telefonica and Lycos Europe told us they knew nothing of such an approach.
By Robert Andrews