/raid1/www/Hosts/bankrupt/TCREUR_Public/000519.mbx      T R O U B L E D   C O M P A N Y   R E P O R T E R     

                        E U R O P E

          Friday, May 19, 2000, Vol. 1, No. 10
  
                        Headlines


N E T H E R L A N D S

BAAN COMPANY: Shares in Ailing Firm Continue Slide


S P A I N

TELEFONICA: Placed On RatingAlert Negative


U N I T E D    K I N G D O M

BOO.COM: On-line Retailer has Collapsed Through Lack of Funds
LIBERTY: Venerable Department Store Sold to Property Company MWB



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N E T H E R L A N D S
=====================

BAAN COMPANY: Shares in Ailing Firm Continue Slide
--------------------------------------------------
Sensing the inevitable, investors continued to slam shares of
troubled business software firm Baan on Wednesday. Shares of Baan
were down 7.4 percent to 1.87 euros.

"There is general concern that Baan won't make it," ING Barings
analyst Cornelis Bos told Reuters.

"Its survival depends on interim measures being taken...and the
Bear Stearns financing is unsure now that the share price is
solidly below three euros."

Instead investors are now betting on a takeover of the company
following bankruptcy. Initially buyers hoped a takeover could
come before a collapse.

Baan, which once rivalled Europe's leading maker of business-
management software SAP, is again under threat of being removed
from the AEX blue chip index, traders say.


=========
S P A I N
=========

TELEFONICA: Placed On RatingAlert Negative
-------------------------------------------
Fitch IBCA, the international rating agency, has placed the 'AA-'
Long-term (AA minus) and the 'F1+' Short-term ratings of Spain's
Telefonica on RatingAlert Negative pending the acquisition by its
67%-owned internet subsidiary Terra, of the US web portal Lycos,
for USD 12.5 billion. Terra's bid represents an implied premium
of around 35% of Lycos closing share price yesterday.

Lycos is the fifth largest web portal in the US. Following the
acquisition, Terra Lycos will have combined revenues of around
USD 500m, a strong presence in over 37 countries, particularly in
the US and Latin American markets but also in Europe and Asia,
and close to 175 million Internet page visits a day. The
resultant group will be managed by Lycos but Telefonica's
chairman, Juan Villalonga, will chair the new entity.

Telefonica's stake in Terra will be diluted to around 35%-40% and
the second major shareholder will be the US Internet investment
holding company, CMGI, which has a 17% stake in Lycos. The
operation will require the approval of the respective
shareholders. The purchase will be funded through Terra stock and
will be followed by a USD 2bn rights issue by Terra, fully
underwritten by Telefonica. Concurrent with the acquisition,
Telefonica has agreed to form a joint venture with Bertelsmann,
the German media group. Bertelsmann will provide content and e-
commerce material to Terra Lycos. The new company will also
acquire 49% of a wireless telecom company for Internet use, to be
established with Telefonica.


======================
U N I T E D    K I N G D O M
======================

BOO.COM: On-line Retailer has Collapsed Through Lack of Funds
-------------------------------------------------------------
Boo.com has crashed due to lack of cash just six months after the
on-line sportswear retailer launched. The company failed in its
appeal for $30 million in additional cash, in spite of sales that
continued to rise. Reuters reports investors were not swayed
during last-minute negotiations to avert receivership. Two of the
firm's more well-known investors are Bernard Arnault, chairman of
LVMH, and Italian clothing group Benetton.

In a statement issued by Boo.com, the firm's owners said: "We are
deeply disappointed that it has been necessary to ask KPMG to
become liquidators of the company."

The group apparently failed to draw enough new customers quickly
enough to keep up with rising start-up costs. The firm expects to
let go 300 staff members as a result of the closing.

Meanwhile, PricewaterhouseCoopers published a report the same day
that warns one in four British Internet firms are also in danger
of running out of cash.  


LIBERTY: Venerable Department Store Sold to Property Company MWB
----------------------------------------------------------------
Following several years of shareholder infighting, Liberty will
be sold to a joint venture for a per share price of 300p. The
Times reports London department store will be 70 percent owned by
property company Marylebone Warwick Balfour (MWB). South African
financier Brian Myerson, who purchased a chunk of the company in
1992 in an effort to unseat the company's leading shareholder,
Elizabeth Stewart-Liberty, will own 15 percent. Stewart-Liberty
has agreed to a œ72 million cash offer for her 13.7 percent stake
in the company.

MWB wants to set Liberty on firm footing and then continue to
acquire other retailers that have attractive property. The group
intends to list Liberty on the Alternative Investment Market.


Richard Balfour-Lynn, MWB's chief executive, praised the deal as
ending years of rancour among warring shareholders.

Yesterday Liberty said annual pre-tax losses increased to œ2.9
million from œ1.6 million. Liberty shares rose 27«p to 292«p.



S U B S C R I P T I O N   I N F O R M A T I O N

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