Barry Diller and John Malone went after one another in court over whether Diller could get shareholders in IAC/Interactive (IACI) to approve breaking the company into five piece. Each would be traded as a public company. Malone’s Liberty Media (LCAPA) said that the voting rights it had given Diller for its shares did not extend to the level which would allow them to be voted for dismantling the company.
The entire matter was pushed into the Delaware courts, and Diller won. According to MarketWatch "Vice Chancellor Stephen Lamb ruled Friday that "Liberty has failed to demonstrate that Diller has breached or threatened to breach any contractual duty he owes to Liberty," according to Lamb’s 78-page opinion."
For shareholders, it is a Pyrrhic victory. IACI shares trade near a 52-week low at $20.49. The were above $40 in February of 2007. Revenue growth at the company’s big HSN operation has been very modest. Operating income at the unit fell last year. The firm’s Lending Tree operation has been badly damaged by the current downturn in housing. IACI’s media operations, which include Ask.com, are too small to compete with operations like AOL and MSN.
Diller may have won in court, but it did nothing for his shareholders.
Douglas A. McIntyre