Ticketmaster isn't likely to be sold off soon.
Barry Diller wants the West Hollywood-based company sold as part of the breakup of IAC/Interactive, a New York-based media company. So do the shareholders, including John Malone, chairman of Colorado-based Liberty Media Corp. But Malone wants to keep his "super voting" two-for-one shares, and the dispute over that will likely delay the inevitable until 2009 or beyond, analysts say.
Diller, chairman and chief executive of IAC, fresh from his recent victory over Malone in the battle for control of the company, will now go to the IAC board seeking approval for a spin-off plan that would create five separate publicly traded companies, including West Hollywood-based Ticketmaster.
Ticketmaster has 520 employees at its offices in West Hollywood and Los Angeles. The company also has offices worldwide.
A judge recently ruled against Malone's attempt to boot Diller from IAC's board.
Meanwhile, IAC has lost nearly 40 percent of its shareholder value since the beginning of the year and most analysts are in a waiting mode regarding the company.
"It's a three-round bout and we've got one more round to go," said Jeffrey Lindsay, analyst with New York-based Sanford C. Bernstein and Co. Inc.
Malone filed suit last year against longtime friend and business partner Diller in an effort to wrestle back majority voting control of IAC before the board could act on a Diller-backed spin-off plan that would reduce Malone's voting stake in IAC.
While Malone owns 26 percent of IAC, he controls 63 percent of the voting rights through the "super-voting" class shares that carry a two-for-one voting status.
Malone helped Diller acquire and grow the Home Shopping Network and build IAC through a series of acquisitions that included Ticketmaster. He granted Diller his "super-voting" share rights but then argued later in court that Diller's IAC spin-off plan violated his proxy agreement and asked the court to block it.
A Delaware judge recently ruled that Malone had permanently given up his proxy rights to Diller. But the judge stopped short of ruling on the spin-off deal legalities.
Now it is up to IAC's board, led by Diller, to decide how to move forward with the spin-off of company assets, including Ticketmaster.
The Diller plan is expected to limit Malone's voting control, giving Diller major voting rights over the newly created entities.
"The control premium is very valuable," Lindsay said. "And if the board goes along with Diller, Malone could very well take them back to court."
Two potential outcomes are now possible.
IAC's assets, even if spun off, could still come under Malone's control, which would make them less attractive to new shareholders than if they were truly stand-alone. On the other hand, the board could offer Malone a significant piece of Home Shopping Network to persuade him to give up his super-voting rights. HSN would be a good fit for Liberty Media, which owns the shopping network QVC.
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