According to the New York Post, IAC/InterActiveCorp. (NASDAQ: IACI) Chairman Barry Diller is expected to meet with his board this week to restart the process of breaking up his company into five separate pieces, sources said. At the same time, Diller and Liberty Media Corporation (NASDAQ: LMDIA) Chairman John Malone are continuing to talk about a deal that would trade one or more of IAC's assets for Liberty's ownership stake in IAC.
The UK Times has learned that Numis Securities, the stockbroking group headed by Michael Spencer, is in "advanced talks" to buy the UK equities business of The Bear Stearns Companies Inc (NYSE: BSC). Numis may look to hire a team of 25 from Bear.
Barry Diller has won his dispute with John Malone. Malone's Liberty Media (NASDAQ: LCAPA) owns a a large piece of the company that Diller runs, IAC/Interactive (NASDAQ: IACI). Diller has the right to vote those shares under a long-standing agreement.
Diller has decided to break IACI into five companies because the businesses in the firm do not have significant relationships to one another. Malone wanted to block the break-up and filed suit in court.
According toMarketWatch, "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."
Diller can now complete his plans.
That leaves open the question of whether IACI is worth more in pieces than it is as a conglomerate. The firm's stock trades at $20, near its 52-week low and down from the period high of over $39. Some of the company's divisions, especially Lending Tree and HSN had tough years in 2007. These would get very low valuations as independent operations and might not make up for the value of more attractive operations like Ask.com
Diller may have gotten his way, but it is not clear that it will help shareholders.
Douglas A. McIntyre is an editor at 247wallst.com.
IAC/InterActive Corp. (NASDAQ: IACI) Chief Executive Barry Diller is one CEO who cannot be tamed by his corporate public relations staff or lawyers. He says what he wants when he wants, seeming not to care much for the potential ramifications.
Take his fight with fellow tycoon John Malone of Liberty Media Holding Corp. (NASDAQ: LINTA) over Diller's plan to split up his conglomerate that's been cobbled together through dozens of acquisitions of seemingly disparate companies. Liberty also happens to own majority stake in IAC. However, a long-standing agreement with Diller allows the mogul to control it through a proxy agreement. Well, at least that was the case until recently.
Liberty has asked a Delaware Chancery Court to remove Diller from IAC's board [subscription required] along with other members, and to have several of Liberty's nominees put in their place. The company also asked for Diller to be removed from BDTV, which the Wall Street Journal described as "a little-known entity through which Liberty owns most of its stake in IAC."
With regulators, politicians and rating firms biting at their heels, Countrywide Financial Corporation (NYSE: CFC) believed that it had no choice but to approach Bank of America Corporation (NYSE: BAC) last month about a merger, reported the Wall Street Journal. That fear led to BAC's $4B takeover of Countrywide, the Wall Street Journal reported.
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Shares of Britain's third-largest drug maker, Shire Plc (NASDAQ: SHPGY) plummeted yesterday to a two-year low on concerns about demand for its attention deficit hyperactivity disorder treatment for children, Vyvanse, the Telegraph reported.
The controlling shareholders of Dow Jones & Company Inc (NYSE: DJ) -- the Bancrofts -- are still debating whether or not to accept Rupert Murdoch's New Corporation's (NYSE: NWS) $5B offer to buy the company, and the debate is still too close to call, reported the Wall Street Journal.
Dutch bank ABN Amro Holdings NV's (NYSE: ABN) boards today refused to endorse either of two competing bids for the bank, effectively taking a neutral position on the issue, reported the Financial Times.
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Theme park operator Cedar Fair Entertainment (NYSE: FUN) has reportedly entered into quick- moving negotiations with investment firm Destiny Capital Solutions about a $4.1B takeover of the theme park operator, reported the New York Post.
"Seeking to put some of our capital back to work, today we're going to step up and purchase shares of DirecTV (NYSE: DTV)," says Bill Martin.
In his FindProfit newsletter, he explains, "We believe that investors are beginning to realize that the competitive worries for satellite are overdone. In fact, satellite has actually picked up market share over the past year.
Via technology upgrades and strategic partnerships, he notes that DTV is poised to accelerate its competitive edge in the high-definition TV marketplace, while increasing the penetration of a variety of product 'add-ons,' such as high-definition boxes, DVRs, etc., that should boost margins.
He suggests, "As John Malone has done at other entities where he has significant influence such as Liberty Capital (NASDAQ: LCAPA), Liberty Global (NASDAQ: LBTYA), Expedia (NASDAQ: EXPE), and IAC\Interactive (NASDAQ: IACI), we expect DTV to move to buy-in significant amounts of stock over the coming year as it re-levers its balance sheet."
Investment bank Sifel Nicalous believes that IAC/Interactive (NASDAQ: IACI) may sell one of its largest units, Home Shopping Network to Liberty Interactive (NASDAQ: LINTA), a company controlled by John Malone. It would allow IACI to become an almost purely internet company.
Such a sale would transform the company. Retail operations which is mainly HSN accounted for $787 million of IACI's $1.595 billion in revenue last quarter. The balance was from online businesses including Lending Tree, Ask.com, and Match.com. While HSN was half of the company's revenue, its was only 43% of operating profit.
IACI's chairman Barry Diller would be gambling that a pure internet play would be valued more highly by the stock market than a hybrid firm with a large retail component.
While Diller may be right, he would end up with an only operation much smaller than properties like MSN and AOL, and that lack of scale could worry investors.
It appears John Malone, once again, is setting up for one of the largest trades in media history. Liberty Media Corporation Capital (NASDAQ: LCAPA) CEO indicated that he would rather own a stake in DirecTV (NYSE: DTV), a mature and highly competitive media distribution platform, than News Corp. (NYSE: NWS), with its massive global programming and infrastructure platform -- which now includes Myspace.com.
Why would master deal-maker Malone want to do this? Most likely to then turn around and sell DirecTV to the likes of Verizon (NYSE: VZ) and AT&T (NYSE: T). Why? The fiber network that the Baby Bells have constructed is not getting much of an uptake. Market share gains are anemic and they are getting killed by the cable companies.
One reason the Bells effort is not getting traction is they have no experience signing deals with programmers. To get competitively priced content, you need scale in the form of a big audience. The Bells do not have this, but DirecTV would provide this.
This Fly's prediction is: Malone gets control of DirecTV and then auctions it off with the bidders being Verizon and AT&T. The Bells will lose too much face if they have to admit their fiber build-out was a bust. Malone will convince them to pay a nice premium to his purchase price.
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