Liberty Media, the media holding company headed by cable-TV pioneer John Malone, filed a court action Monday to oust Barry Diller, chairman of InterActiveCorp, from the IAC board. Liberty, which owns a majority voting stake in the new-media company, further called for its own representatives to replace several IAC board members, including Diller’s wife, designer Diane von Furstenberg.
The court action comes on the heels of dueling lawsuits the companies filed against one another in a dispute over IAC’s attempt to spin off its businesses -- including the HSN home shopping channel -- into separate publicly traded companies that would limit Liberty’s influence.
In a statement released Tuesday, IAC called the court action "preposterous" and said that "Liberty does not control IAC." Explaining that the company had filed suit in Delaware Chancery Court in an effort to address Liberty's objections to the spin-off--which would leave Liberty and other shareholders with a single-class stock structure while IAC retains its dual-class shares--IAC said that Liberty had ignored its "well-intentioned effort at peaceful resolution" and had "gone off the deep end."
"This action is a desperate sideshow designed to exert pressure on the Board and management of IAC as they attempt to responsibly act in the best interest of their stockholders," the statement continued. "All it demonstrates is that Liberty will stop at nothing to advance their own interests at the expense of the other stockholders. Needless to say, IAC will not be daunted. IAC and Mr. Diller are highly confident that they will prevail on the merits of the ongoing litigation, and regret the fact that IAC's employees and stockholders have been exposed to such reckless and frivolous actions."
Liberty has not responded to a request for comment, but a spokesman told The Wall Street Journal that "IAC's suing of Liberty and our responses to that action speak for themselves."
Colorado-based Liberty has increased its profile as a creator and distributor of TV content in the past year with its acquisition of DirecTV from News Corp. and the growth of its cable-programming business through its Starz Entertainment division.
Malone and Diller have worked in partnership for more than a decade to build IAC, with Malone allowing Diller to vote on behalf of Liberty’s stake. But the relationship has soured over IAC’s flagging stock performance.
Liberty recently increased its stake in IAC, scooping up 14 million shares of common stock at $24.25 each and bringing its total stake to 30%. The company explained in a release that it "took advantage of recent weakness in IAC's shares to increase its holding at an attractive price."
